Tavistock has agreed to purchase 21% of financial advice and employee benefits consultant LEBC in a deal which values the firm at just under £50m.
Tavistock has agreed to acquire all of the 212,738 A ordinary shares of £0.01 each in LEBC for £10m from Marie McVitie, the widow of LEBC founder and former chief executive Jack McVitie.
While £6.0m of the consideration will be paid upon completion of the deal, the remaining £4.0m will be paid 12 months after the completion of the deal.
Ownership of the A ordinary shares entitles the right of first refusal should any of the company’s other shareholders wish to sell.
The transaction is conditional upon Financial Conduct Authority (FCA) approval as Tavistock will become a controller of each of LEBC’s regulated subsidiaries
LEBC has three wholly owned subsidiaries, two of which are regulated by the Financial Conduct Authority, LEBC Group Limited and Aspira Corporate Solutions Limited, and a third which is unregulated, LEBC Hummingbird Limited.
The LEBC group was established in 2000 as a provider of financial planning and consultancy services to private and corporate clients.
It employs 46 financial planners, has more than 75,000 clients and an estimated £5bn of assets under advice, of which more than £500m is invested in LEBC’s model portfolio service.
LEBC’s draft accounts for the financial year ended 30 September 2021 show it achieved gross revenues of approximately £15.0m and generated EBITDA (earnings before interest, tax, depreciation, and amortisation) of approximately £3.3m.
LEBC’s largest shareholder is the BP Marsh & Partners which owns 60% of LEBC’s voting rights.
Commenting on the deal, Derek Miles, managing director at LEBC, said: “We are delighted to welcome Tavistock as a shareholder within our rapidly growing business.
“We expect EBITDA to more than double this financial year and look forward to a long and successful partnership with Tavistock, to our mutual benefit.”
Brian Marsh, chairman at BP Marsh & Partners, said: “We welcome Tavistock as an investment partner in LEBC and look forward to working closely together to accelerate the development of the business.”
Brian Raven, chief executive at Tavistock, added: “The initial focus will be on accelerating LEBC’s commercial development and operational efficiency, as well as enhancing its oversight and compliance regime through the introduction of Tavistock’s proprietary risk-based processes and procedures.”