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Legal eagle AFH in £530k swoop on law firm's advice arm

Legal eagle AFH in £530k swoop on law firm's advice arm

Consolidator AFH has bought the advice arm of a legal firm for £530,000.

AFH said this morning it has acquired the client portfolios of Meritor, the financial advice business of Freeths LLP, a national legal practice.

Chief executive Alan Hudson (pictured) said AFH would look to pick up more client books from firms where advice was not the core business.

The maximum purchase price is £530,000. This breaks down into an initial cash consideration of £330,000 (which matches the amount of annual recurring revenue AFH expects the business to generate) and a deferred consideration payable in cash over the next 14 months.

The deferred consideration is ‘subject to performance criteria of the assets acquired being achieved’.

Hudson said: ‘We are aware of a number of similar businesses linked to legal and audit practices that are deemed non-core to those organisations. We believe that the mutual benefits of this transaction will demonstrate the commercial advantages to similar organisations and their clients in the future’.

Last year AFH completed 14 acquisitions with a combined value of £18.7 million, including two acquisitions with a target value in excess of £5 million.

Some 13 deals were of IFA firms, while the other acquisition was of a protection business.

The company has paid over £3.2 million in deferred consideration for acquisitions made in previous years. The average deferred pay-out for those acquisitions which had reached a performance milestone during the reporting period exceeded 90% of the target deferred consideration during 2017.

This year AFH has acquired Hertfordshire-based advice firms Harrison White FS in a £738,000 deal, and Monopoly Financial Consultants for £631,000.

Freeths has offices across the UK.

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