Wealth managers merge in £600 million deal

Thu, 07 Apr 2016 | MERGER

Tilney Bestinvest has snapped up rival company Towry in a £600 million deal that will see the new joint venture form the largest wealth management firm in Scotland.

Currently, Tilney Bestinvest employs around 55 staff in Scotland, while Towry, which has a stronger presence in the country, employs around 70. Tilney Bestinvest will acquire its rival Towry from the company’s majority shareholder Palamon Capital Partners and has issued a statement saying the new company will create "one of the leading UK wealth management firms offering clients award-winning investment management alongside highly skilled financial planning on a national scale”.

The newly combined company will have an estimated £20 billion of assets under its wealth management services, which could be an important factor in helping it ride the storms of regulation and compliance costs.

Jason Hollands, managing director at Tilney Bestinvest, said of the deal: “Scale in central support functions such as operations, IT and compliance will better enable us to service clients. It should also help us get access to the lowest cost share classes when investing our clients’ assets.”

However, according to The Daily Telegraph, there are questions over whether Tilney Bestinvest had paid too much for Towry. For example, Eamonn Flanagan, an analyst at Shore Capital, said: “[The price] certainly would have been justified at some point given the progress the management have done with Towry. But it just feels a bit rich to me.”

For more information on mergers and acquisitions, see the series of guides on Post Merger Integration.


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