US private equity firm offers £225m for AFH's share capital

The board of directors at national independent adviser AFH have accepted the terms of a takeover offer. Cortina Bidco, a newly formed company parented by US private equity firm Flexpoint Ford, offered £225m for AFH’s share capital, valuing each scheme share at 463p. 

The deal is subject to shareholder and regulatory approval. AFH’s directors have confirmed they will recommend that the shareholders vote in favour of the transaction.

AFH’s directors believe the deal to be the “most attractive route for AFH to regain its growth trajectory”. The firm believes that, after its initial public offering in 2014, its growth was stunted in comparison to privately-owned firms, and that the takeover will be in the best interests of “all stakeholders”.

Alan Hudson, chief executive of AFH, said: “The executive directors and I have always sought to deliver on our strategy of organic and M&A-led growth, but in recent years this has been curtailed by being an Aim-quoted company.

“We believe the offer reflects our strong track record of increasing shareholder value, Flexpoint’s endorsement of our strategy and confidence in the continued success of AFH, as well as further investment required in the business.” 

Cortina Bidco’s takeover of AFH reflects a recent trend of large US private equity firms buying up UK wealth managers and advisers, such as Carlyle’s purchase of Harwood Wealth and Anacap’s takeover of Novia.

Steven Begleiter, managing director of Flexpoint, said: “We believe that the UK wealth management market is currently undergoing an important transition, as regulatory and demographic trends are driving increasing demand for high quality financial advice that can be met by IFA firms with a long-term and client-centric view.

“In addition, the market is highly fragmented, which provides an opportunity to service customers better and create value through consolidation.”