The merged business, which upon completion will be named Tilney Smith & Williamson, will be an integrated wealth management and professional services group, offering an “unrivalled breadth of value-added services focusing on private clients, businesses and charities”.
The combination of Tilney and Smith and Williamson brings together two of the UK’s longest established wealth management and professional services businesses, founded respectively in 1836 and 1881.
Smith and Williamson shareholders will receive consideration valued at £625m, to be satisfied through a combination of cash consideration and shares in the enlarged group.
Its management shareholders will be rolling the majority of their investment into the equity of the enlarged group. The transaction values the combined business at an enterprise value of approximately £1.8bn.
The combined business will also have revenues of circa £500m and EBITDA of £150m. The transaction is expected to complete in early 2020, subject to regulatory approvals.
The boards of the respective companies said they expect the merger will deliver “long-term benefits for clients, employees and investors.” In particular, the combined group will:
- Create a unique and differentiated client proposition, covering professional services, financial planning and investment management;
- Share a fundamental commitment to client-centric values;
- Benefit from an expanded office network across 36 towns and cities in the UK, Ireland and the Channel Islands;
- Deliver investment services that can cater to the full range of clients’ investment needs, including execution-only investing, investment advisory services, centrally-managed and bespoke discretionary investment management;
- Have a powerful, multi-channel capability in its investment and financial planning business, allowing clients to interact in a way that best suits them, including face-to-face, an online platform and over the phone;
- Provide clients with continuity in the relationship with their investment manager, financial planner or professional services team; and
- Through increased scale, enable enhanced investment in technology for the benefit of its clients.
The board of Tilney Smith and Williamson will comprise representatives from both firms. The chairman of the merged business will be Tilney chairman Will Samuel, with Tilney chief executive Chris Woodhouse as group chief executive. Kevin Stopps and David Cobb, joint-CEOs of Smith and Williamson, will join the board of the enlarged group upon completion. It added the further details of the combined board will be announced in due course.
Woodhouse said: “The merger of Tilney and Smith and Williamson represents a compelling combination and together we will look to build on the considerable and complementary strengths of both firms.
“Like Tilney, Smith & Williamson has an excellent reputation for looking after its clients over many years and we recognise the value its culture and expertise will bring to the combined group.”
He added: “This is a transformational deal, which will create a truly unique business, able to support clients from across the wealth spectrum with a comprehensive range of services for both their personal wealth management and business needs.”
Cobb and Stopps said: “We are delighted to be merging with Tilney, a business that we believe is an excellent partner for Smith and Williamson. The enlarged group will be a leading wealth management and professional services business, benefiting clients and colleagues in both companies. The investment management and professional services market is changing rapidly, with the evolution of client needs accelerating.
“The combination of our two businesses creates real scale, broader capabilities and complementary service offerings, enabling the merged group to enhance existing client relationships and win a higher share of new business opportunities. We look forward to working with Tilney’s management to complete the transaction and bring the two companies together.”
Tilney was advised on the transaction by Evercore and Freshfields Bruckhaus Deringer LLP. Smith and WIlliamson was advised by Keefe, Bruyette and Woods and Macfarlanes LLP.