Editor in Chief (interim) AccountingWEB
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Smith & Williamson returns to altar with Tilney

The long-running engagement between accountants Smith & Williamson and wealth management group Tilney is back on after extra private equity funding was found to encourage regulators to bless the union.

1st Jun 2020
Editor in Chief (interim) AccountingWEB
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Tilney and Smith & Williamson go back to the altar
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When we last heard from the suitors, Tilney was proffering £625m for the UK-based accountancy group. But the vision to create the UK’s biggest integrated wealth management and professional services group failed to gain the approval of the Financial Conduct Authority, FT Advisor reported in January.

A new deal was announced this morning (1 June), backed with transaction funds “advised by” private equity investor Warburg Pincus alongside another investor, by Permira.

“The revised transaction structure will result in a significant reduction in external debt for the combined group, lower ongoing financing costs and an improved regulatory capital position,” Smith & Williamson said.

According to the accountancy firm’s statement, the valuation will match the original transaction price for individual Smith & Williamson shareholders. The firm’s managers will roll their equity holidings into the new, combined group, while its largest shareholder, AGF, will dispose of its investment when the deal completes. Subject to regulatory approvals, this is expected to happen later this year.

Smith & Williamson already offers a range of private client and wealth management services, but part of the attraction for what is being presented as a merger of the two parties is the complementary nature of the clients they serve and their geographical presence, the firm said.

The combined firm will will be responsible for around £44bn in assets under management and is projected to turn over £530m a year, making it the UK’s fourth largest wealth management business. With the wealth management fees behind it, the group would become the country’s sixth largest professional firm by fee income, it said.

For the new investor, Warburg Pincus, Tilney Smith & Williamson will be its sixth investment in a wealth management company.

Smith & Williamson co-chief executives David Cobb and Kevin Stopps said the revised structure “delivers a more robust financial structure and a strong additional partner for the future in Warburg Pincus”.

In a nod to the hurdles they encountered while negotiating the deal, they added, “It is testament to the outcome that we have been striving for and the strong working relationship between all parties that we have been able to reach this agreement despite the Covid crisis.”


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