Arc Fund Management, the AIM listed asset manager, has bought financial advisory company Throgmorton Asset Management (TAM) for a sum in the region of £2.7m.
This includes an initial amount of around £1.61m including £1.2m cash and £405,000 in shares. A deferred amount up to £1.11m is payable subject to certain performance targets being met by TAM before December 2008.
Arc says the acquisition will help in the development of its wealth management division and will grow its funds under management to £275m.
TAM has estimated funds under advice of £150m and its normalised earnings for the year to 31 December 2006 amounted to £210,000 on turnover of £1.57m with net assets of £168,250.
It is intended that, following the acquisition, one of the directors of TAM will be appointed to Arc's board.
Christopher Rowe, Arc's CEO, commented "This acquisition lays the foundations of Arc's wealth management division. The establishment of this division is a significant step in the development of the Group and we will go on to grow it both organically and by acquisition.
"For the group, the purchase of TAM is earnings enhancing and improves the quality of our earnings and increases funds under management. In addition, our existing client base will have access to a wider range of services as well as Arc's range of investment products becoming available to TAM's clients."
Arc was formed in 2002 when it took over Sherriff Research and changed its name to Arc Fund Management. The group specialises in Enterprise Investment Scheme (EIS) and VCT investments. In June 2005, it launched its European Property fund. Structured as an OEIC, the fund includes residential property as part of its investment strategy.
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