Tilney in exclusive talks to acquire Smith & Williamson
Prepare to scratch another merger on to the M&A scoreboard as the Tilney Group is engaged in exclusive discussions to snap up Smith & Williamson.
The wealth management firm has confirmed the weekend’s press speculation surrounding a potential merger with the mid-tier accountancy firm Smith & Williamson.
If the deal goes through the combined businesses would command over £45bn of assets under management, Tilney said in a statement.
Smith & Williamson also released a statement regarding the up-for-grabs shareholding in the firm. At this stage, as the Smith & Williamson press release suggests, the deal looks close to the dotted line.
“The respective Boards believe that a merger of Smith & Williamson and Tilney has the potential to deliver significant benefits to the clients, employees, partners and shareholders of both businesses and create a market-leading, integrated, UK wealth management and professional services firm.”
However, this is still not a done deal with discussions still ongoing and a final announcement slated to be made in due course. “At this stage, there can be no certainty that a transaction will proceed,” noted Tilney.
The combined clout of the two businesses would boast 250 financial planners, 240 investment managers and more than 100 partners in professional services. Smith & Williamson alone has over 1,700 people. Tilney, meanwhile, manages £23bn of assets for clients ranging from private investors, charities and professional intermediaries. Any deal would allow both brands to keep their names (paywall).
It wouldn't be the first time that these two have crossed paths. The last time Tilney circled Smith & Williamson was back in 2017, when they attempted to outbid Rathbones with a last-minute £2bn merger offer. Not only did Tilney scupper Rathbones' chances, but in the end, both deals collapsed, and Smith & Williamson opted to pursue stock market listing instead.
Tilney themselves was acquired five years ago by the London-based buyout group Permira who, coincidentally, are the frontrunners to buy a minority stake in Cogital. As reported on AccountingWEB, Cogital has courted interest from a number of private equity groups, and Permira is the current favourites to secure a deal that would value Cogital at £1bn.
The Smith & Williamson-Tilney deal and in particular the acquisitive movements of Cogital highlights how crucial the private equity market has fast become for the accountancy profession.
In recent times, the consolidation model has resurged in the accountancy profession with a different model to that of the bygone RSM Tenon days and an emphasis on technology.
However, the consolidation in the wealth management market has been caused by tougher regulations and as this merger would suggest, a shift towards scale over personal relationships.