Mattioli Woods has agreed to a takeover from financial private equity specialist Pollen Street Capital as consolidation in the UK funds sector gathers pace.
Pollen Street is paying 804p per share in cash for Mattoli Woods or £432 million in total and a 34% premium to last night’s closing price.
Mattioli's takeover adds to a wave of takeovers in the small and mid-cap end of the stock market by private equity firms snapping up what they see as undervalued businesses.
In agreeing to the offer, Mattioli Woods' board said that to succeed in the current environment pension advisers, fund managers and wealth platforms need scale and technology.
Going it alone would require considerable capital funding, which would be difficult to achieve at the current share price without significant dilution.
Joining Pollen Street Capital brings significant financial and strategic resources to accelerate the delivery of M&A and organic growth plans, the statement added.
Pollen Street said it is attracted by 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".
UK-based fund managers have endured a tough twelve months caused by investors switching away from actively managed funds towards passive investments such as trackers, ETFs and interest-rate focused money market funds.
Data from sector trade body the Investment Association yesterday showed that £38.1 billion had been withdrawn from active funds over the past year alone.