UK-based wealth manager group Mattioli Woods said today (8 March) that it has agreed to be bought by Tiger BIDCO, a Guernsey registered wholly-owned subsidiary of investment vehicles advised and managed by private equity firm Pollen Street Capital.

Under the terms of the £432m deal, Pollen Street would pay 804p per share in cash for Mattioli, which is a 34% premium to the closing share price on Thursday.

Anne Gunther, non-executive chair of Mattioli Woods, said: "The Mattioli Woods board is pleased to announce its unanimous recommendation of this cash offer for Mattioli Woods, which not only 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.

"The Mattioli Woods board recognises the opportunities that can be delivered under private ownership, including access to incremental growth capital and other resources to accelerate the development of its technology and pursue transformative acquisitions.

"Pollen Street Capital is highly supportive of the Mattioli Woods management team's strategy to create one of the UK's leading wealth managers with the critical scale and holistic product offering to address the changing financial planning and investment needs of its clients."

The statement further said that since Mattioli Woods' shares were admitted to AIM in November 2005, the business has grown both organically and by acquisition, and Mattioli Woods' 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.

From the Mattioli perspective, reasons for the deal included:

  • The Mattioli Woods directors believe that the acquisition provides an attractive offer for Mattioli Woods Shareholders to realise an immediate cash value for their investment whilst also presenting an opportunity to accelerate Mattioli Woods' vision to achieve continued growth across its core pillars of advice, investment and administration. The Consideration represents an adjusted price/earnings multiple of 16.3 times (calculated by reference to Mattioli Woods' adjusted earnings per share after tax for the 12-month period to 30 November 2023).
  • The wealth and asset management industry has seen a wave of consolidation activity in recent years reflecting the drive for scale and technology which are seen as pre-requisites for success and Mattioli Woods has participated in this. Pollen Street Capital brings 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. The Mattioli Woods directors therefore believe that the new ownership structure and choice of partner will facilitate clear strategic benefits to Mattioli Woods' internal and external stakeholders, including Mattioli Woods' employees and clients, by enabling the company to make appropriate investments for the long-term benefits of the business.

For Bidco the highlighted reasons for the deal were:

  • Bidco believes that Mattioli Woods has developed a strong position in the UK wealth and asset management and employee benefits markets, offering a distinctive and diversified range of solutions to clients, underpinned by a highly trusted brand, client-centric culture and technology-enabled processes.
  • Bidco is attracted to Mattioli Woods' vertically integrated, holistic model with its high-quality brand and client base and clear organic and inorganic growth opportunities across its wealth and asset management and employee benefits business. Mattioli Woods' ability to capture the full wealth value chain by offering a full range of services across financial planning, employee benefits, investment management and pensions administration represents a highly compelling value proposition for clients, and the opportunity for clients to access a range of mainstream and alternative strategies.
  • In order to capitalise on the significant opportunity in the UK wealth market, Bidco believes that Mattioli Woods would benefit from transitioning to private ownership with the support of a growth-focused shareholder, who can provide the capital and longer-term view of value creation to enable the management team to continue to invest in Mattioli Woods' capabilities and client propositions.
  • Bidco believes that transitioning to Pollen Street Capital's ownership will provide Mattioli Woods and its management team the flexibility to take longer-term decisions to maximise the growth potential of the business, whilst also providing strategic support and leveraging strong industry expertise to develop new growth areas and operational expertise to drive greater efficiency. Pollen Street Capital has a strong track record of investing in financial services businesses across Europe, deploying capital into growth-oriented businesses and supporting their management teams in achieving their strategic ambitions.