Tavistock has purchased a 21 per cent stake in LEBC from the widow of former chief executive Jack McVitie.
Tavistock will acquire 212,738 ordinary shares of £0.01 each for £10m from Marie McVitie.
Payment will be split in two, around £6m will be paid upon completion and a further £4m to be paid twelve months later.
Although a minority shareholding, it allows Tavistock to become a ‘controller’ in each of LEBC’s regulated subsidiaries – requiring the deal receive regulatory approval.
LEBC is an independent financial advisory group with three wholly owned subsidiaries in it’s group, LEBC Group Limited and Aspira Corporate Solutions Limited and a LEBC Hummingbird Limited.
The first two are regulated by the Financial Conduct Authority while the third is unregulated.
“We are delighted to welcome Tavistock as a shareholder within our rapidly growing business.Derek Miles, managing director at LEBC
“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 Raven, chief executive of Tavistock, added: “We look forward to working in close partnership with B. P. Marsh & Partners and with LEBC’s management team.
“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.”
LEBC was established in 2000 and now employs 46 financial planners, has over 75,000 clients and an estimated £5bn assets under advice, of which over £500m is invested in LEBC’s model portfolio service.
LEBC’s draft accounts for the financial year ended September 30, 2021 show that it achieved gross revenues of approximately £15m and generated EBITDA of approximately £3.3m.
At September 30, 2021, LEBC had gross assets of £9.6m and net assets of £5.6m.
LEBC’s largest shareholder is the Aim quoted company B. P. Marsh & Partners, which owns 60 per cent of LEBC’s voting rights.
B.P. Marsh & Partners is a specialist investor in early-stage financial services intermediary businesses in the UK and overseas.
Commenting on this new partnership, Dan Topping, group chief investment officer at B.P. Marsh & Partners, said: “B.P. Marsh welcomes Tavistock as our new investment partner in LEBC.
“This is a great opportunity for all businesses involved, with there being a number of synergies to be implemented over the coming months.”
To keep up to date with recent M&A activity in the financial market, take a look at our dedicated news page here.