U.K.-based Tilney Group Ltd. and Smith & Williamson Holdings Ltd. agreed to merge their respective businesses to create an integrated wealth management and professional services group with over £45 billion of AUM.
The deal values the merged businesses at an enterprise value of about £1.8 billion. The combined entity, which will be named Tilney Smith & Williamson upon completion of the transaction, is estimated to have pro forma revenues and earnings before interest, tax and depreciation, or EBITDA, of roughly £500 million and £150 million, respectively.
Under the terms of the deal, Smith & Williamson's shareholders will receive a consideration of £625 million via a combination of cash and shares in the enlarged group. Smith & Williamson will also pay a proposed special dividend to qualified shareholders from accumulated surplus reserves before completion of the merger. The management shareholders of Smith & Williamson will roll the majority of their investment into the equity of the merged entity.
Tilney Group Chairman Will Samuel and CEO Chris Woodhouse will take on the same posts at the combined business. Smith & Williamson's co-CEOs, Kevin Stopps and David Cobb, will join the company's board upon completion of the transaction, with further details of the combined board to be disclosed in due course.
Woodhouse said the enlarged group will have a significant number of trusted advisers, including roughly 280 investment managers, 260 financial planners and a professional services business with about 150 partners and directors. The entity will serve clients in different locations across the U.K., Ireland and Channel Islands.
In August, Tilney Group, an investment and financial planning services provider, confirmed it was in exclusive discussions with fellow investment manager Smith & Williamson over a potential deal.
The deal is expected to complete in early 2020, subject to regulatory approvals.
Evercore and Freshfields Bruckhaus Deringer LLP served as advisers to Tilney Group on the deal, while Smith & Williamson was advised by Keefe, Bruyette & Woods and Macfarlanes LLP.
