Private equity firm BP Marsh & Partners has bought a further 17.8% stake in national advice firm LEBC for £7.1 million.
BP Marsh now has a 60.9% stake in LEBC. The remaining shares are held by LEBC chief executive Jack McVitie.
The AIM-listed private equity business has gradually been increasing its stake in LEBC since it first took a 22.5% stake in 2007. In February 2014 it purchased a 12% stake for £1 million, before buying a further 8% stake last June in a deal worth £1.9 million.
It is a slightly different strategy for BP Marsh, which usually takes minority stakes in financial services firms rather than become a majority owner. In a statement issued to the market, BP Marsh said the opportunity to increase investment in LEBC beyond its usual position ‘proved compelling’.
The statement said that since the retail distribution review came into force at the end of 2012 LEBC has increased profits by 184%: in its latest financial year ending 30 September 2016 it posted a trading profit of £2.1 million, compared to £740,000 in the same period in 2013.
Despite owning more than half of the shares in LEBC, BP Marsh said it would not make any changes to the advice firm’s management team.
However as part of ‘shareholder protection’ requirements in place BP Marsh investment director Oliver Bogue will join LEBC’s board as a non-executive director. He will sit alongside BP Marsh head of investor relations Camilla Kenyon, who is also a non-executive director at LEBC.
Kenyon said the latest investment was made because LEBC ‘is on an exciting growth trajectory’ and had an opportunity to grow.
‘We are pleased to increase our shareholding and continue to work with management to grow the business, which we believe occupies a desirable position in the financial advice market,’ she said.
McVitie said BP Marsh’s backing had helped the company grow since 2007.
‘LEBC has grown significantly over the past 10 years, consistently improving performance on every financial metric. Our partnership with BP Marsh has been the bedrock of that success,’ he said.
The national advice firm is set to leave network Tenet to become directly authorised later this year.
Story courtesy of New Model Adviser
