AIM-listed European Wealth has struck a deal to acquire advisory firm Compass Financial Benefits (CFB).
Surrey-based CFB is a family run business fronted by John and Michael Robinson with £31 million in funds under influence. In the year to December 2013, the firm had turnover of £434,230, of which approximately 76% was recurring income, and recorded a pre-tax profit of £154,250.
European Wealth will pay a maximum of three times CFB's retail distribution review compliant recurring income for the 12 months following completion in a deal worth £539,150.
CFB will be relocated and fully integrated into European Wealth's head office in London and both John and Michael Robinson will be appointed associate directors of European Financial Planning, European Wealth's financial planning subsidiary.
European Wealth also announced it had raised around £674,000 through a placing of 749,303 new 5p ordinary shares at a price of 90p with existing and new investors, alongside some of its employees. The proceeds of the placing will be used to cover part of the CFB purchase and for general working capital purposes.
Commenting on the news, European Wealth executive chairman John Morton (pictured) told the stockmarket: 'We are pleased to have completed our first acquisition since coming onto the market in May.
'Whilst small, it will not only strengthen our presence in the group personal pension scheme market where we see significant opportunities domestically, but also allow us potentially to leverage our investment management services to Compass's clients.'
He added: 'We also see significant scope for improving compass's operating costs whilst at the same time continuing to grow our overall funds under management and influence. We consider our AIM listing as an important mechanism for completing further selective acquisitions as we continue to increase our funds under management and influence.'