Wed, 15 Feb 2023 | BUSINESS SALE
NatWest Group has agreed a deal to acquire an 85 per cent stake in workplace savings and pension fintech Cushon for £144 million. The acquisition enables NatWest to expand its commercial customer offering with a new suite of financial products, including Cushon’s Master Trust workplace pension and workplace savings accounts.
NatWest says it is looking to “help meet customers’ changing needs at every stage of their lives and support greater financial resilience”, with the acquisition forming part of the bank’s wider aim of providing customers with improved financial wellbeing services.
This strategy has previously seen NatWest acquire children's saving app Rooster Money for an undisclosed sum in October 2021, before subsequently relaunching the fintech as NatWest Rooster Money in 2022.
Cushon was launched in 2014 and says it aims to be a leading part of “a tech-revolution of UK pensions”. The company, which provides pensions and savings services via its mobile app, offers customer highly personalised solutions, along with eco-conscious investments.
Cushon’s Master Trust workplace pension features an investment strategy designed to help users drive down their financed carbon emissions. The company’s other workplace savings accounts include an ISA, GIA, LISA and JISA, whilst it also offers services including financial education and one-to-one financial check-ups.
Since it was founded, the company has raised more than £72 million in equity and debt funding, while it has completed several acquisitions over recent years, reflecting a broader trend of accelerating M&A activity in the UK’s pensions sector.
The firm has acquired several master trusts, including the Creative Pension Trust, the Salvus master trust and Northern Ireland’s Workers Pension Trust, and last year completed the takeover of financial education provider Better with Money.
Commenting on the acquisition, NatWest Wealth Businesses Chief Executive Peter Flavel said: “On average, UK employees are due to outlive their savings by 10 years and we are committed to helping reduce this savings gap. We believe Cushon’s engaging, app-first pension will help customers by moving their pension and workplace savings schemes from a compliance burden to an employee benefit.”
The £144 million consideration for 85 per cent of Cushon’s business would value the entire firm at around £169.4 million. Following the acquisition, Cushon’s management will retain the remaining 15 per cent stake in the company.
Cushon is a portfolio company of listed firm Augmentum Fintech, which invested £5 million in the business as part of its 2021 Series A, which it followed with a further £5.8 million over subsequent rounds. Augmentum says it expects the deal to generate £22.8 million, which would more than double its investment.
Read about what's motivating M&A in the UK pensions market.
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