Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

European Wealth Group to become Kingswood after unveiling plans to buy US broker-dealer

With the acquisition of a US-based broker-dealer and investment adviser, the name European Wealth Group is no longer appropriate
Rising dollar chart
Newbridge has a nationwide network of more than 220 professional advisors and associated broker-dealers, and some US$1.7bn in AUM

London-listed wealth management group European Wealth Group Limited (LON:EWG) is to acquire Newbridge, a US-based, national broker-dealer platform. 

The acquisition will almost double the assets under management (AUM) at the UK company to more than US$4bn and give it a strong footprint in the US.

European Wealth (EWG) said in a statement that it is acquiring the entire issued share capital of KPI US Holdco Inc, which in turn is acquiring Newbridge Securities Corporation and Newbridge Financial Services Group. To make matters a bit more convoluted, KPI US is controlled by KPI (Nominees) Limited, which has a 39.99% stake in EWG. 

READ: European Wealth Group launches £8.8mln fund-raising designed to make it "debt free"

Under the heads of terms agreement, EWG proposes to fund the costs of the acquisition by entering into a US$17.6mln convertible loan with Kingswood bearing an interest rate of 7.5% a year, repayable within three years. The conversion price will either be 20p or the average mid-market closing price of EWG shares in a 20-trading-day period prior to conversion, whichever is the lower.

EWG will fund the initial consideration of US$14.6mln payable by KPI US relating to the acquisition of Newbridge using the proceeds of a convertible loan from Kingswood. It has also agreed to reimburse KPI US for its expenses incurred in relation to the Newbridge acquisition.

The cost of the acquisition may increase depending on the performance of Newbridge over a five-year period from the completion of the acquisition.

Should the acquisition go through, EWG plans to change its name to Kingswood Limited.

READ: European Wealth Group confirms Marianne Ismail as chief executive officer

"We are ambitious to grow organically and energetically by acquisition. This is our first key step to deliver a profitable and differentiated strategy in the financial services arena,” said Marianne Ismail, chief executive officer of EWG.

"Newbridge presents a unique opportunity to invest in an established, well-positioned company that significantly increases our global footprint by gaining immediate access to the largest wealth management market in the world. We are confident that the proposed acquisition will allow us to accelerate our growth path towards our stated ambition of becoming a global vertically integrated financial services platform,” she added.

View full EWG profile View Profile

European Wealth Group Ltd Timeline

Related Articles

Merger
October 11 2017
"It will empower us to benefit from increased scale, enhance our product proposition and leverage operational efficiencies to attract more clients, and significantly increase our AUM."

© Proactive Investors 2017

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use