Wealth and asset management business Mattioli Woods, owner of Maven Capital Partners in Glasgow, has agreed to a £432 million takeover by Tiger Bidco, an acquisition vehicle formed by private equity investor Pollen Street Capital.
The recommended cash offer will see shareholders in Mattioli Woods receive 804p per share, a 34% premium to the 600p price last night. The bid sent the stock up 32.3% or 194p close at 794p, the highest level in almost a year.
Mattioli Woods shareholders will remain entitled to the previously declared 9p interim dividend to be paid on 22 March. It is intended that the acquisition will be implemented by way of a scheme of arrangement, requiring the support of 75% of Mattioli’s investors.
The consideration represents an adjusted price/earnings multiple of 16.3 times.
Pollen Street Capital is a specialist private equity investors in the European financial and business services market.
Anne Gunther, non-executive chair of Mattioli Woods, a former CEO of Standard Life Bank and Standard Life Healthcare, said the deal “delivers attractive value to Mattioli Woods shareholders in cash, allowing them to crystallise the value of their holdings, but also provides significant opportunity for clients, employees and wider stakeholders.”
Mattioli Woods, which was advised by Fenchurch Advisory Partners, was admitted to the Alternative Investment Market in November 2005. Since then it has grown both organically and by acquisition. It acquired Maven Capital Partners in a £100 million cash and shares deal in 2021.
The range of services and products has broadened from its origins as a specialist pension consultant and administrator into one of the UK’s leading vertically integrated wealth and asset management businesses.
The wealth and asset management industry has seen a wave of consolidation activity in recent years reflecting the drive for scale and technology. Pollen Street Capital is expected to bring significant financial and strategic resources to accelerate the delivery of Mattioli Woods’ M&A strategy and organic growth plans.
This includes investing in technology to support long-term organic growth through delivering better service for clients as well as improving operational efficiencies rather than pursuing a progressive dividend policy as a listed company.
The Mattioli Woods directors believe that the delivery of the group’s growth strategy would be both slower and more uncertain without considerable further capital funding, which will be difficult to raise in the public markets at the current share price without materially diluting existing shareholders.