Acquisition engine spinning smoothly
Mattioli Woods (MW) has acquired 50.1% of White Mortgages Limited (White) with an option to purchase the remaining 49.9% within 24 months. White is based in Lincoln and specialises in providing independent mortgage advice as well as protection insurance advice. In the year to 31 Mar 23 it generated revenues of £0.68m and PBT of £0.35m. White looks like a good fit: MW’s existing advice proposition is extended by adding a new in-house mortgages capability, and the White business is well-positioned to benefit from being fed more business from MW’s large adviser-base.It looks like a low-risk deal for MW which has paid £0.425m on a cash-free debt-free basis for its first-tranche 50.1% stake of White (a pre-tax PER of just 2.4X). The second tranche of the deal for the remaining 49.9%, if exercised, will be for a consideration of up to £2.625m, dependent on the attainment of specified targets being met. We would expect the deal to be earnings enhancing and therefore, if the second tranche is exercised with a performance-linked payment in place, we would foresee the full deal PER as being less than 8.7x, an attractive proposition for MW shareholders.
We remind readers that acquisitive growth is a core part of MW’s strategy. It has a long track record of success with 34 acquisitions (excluding White) since its admission to AIM in 2005.
Mattioli Woods provides pension consulting and administration, wealth management, asset management and employee benefits consultancy. Co.'s operating segments comprise:Pension consultancy and administration, which include setting up and administering pension schemes, as well as providing consultancy services for one-off activities; Investment and asset management, which manages and placing of investments on behalf of clients; Property management, which manages collective property investment vehicles, facilitates direct commercial property investments on behalf of clients; and Employee benefits, which assists its corporate clients with employee engagement.
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