Merchant Securities has acquired Belgravia-based IFA and wealth management firm Cavendish Young for a fee of up to £1.3m.
Formed in 1999, Cavendish Young manages £46m for high net worth individuals, with a client base of approximately 2,500.
The initial consideration for the acquisition is £65,000, of which £32,500 was paid on completion.
Further deferred consideration may become payable, depending on the future profitability of Cavendish Young up to 31 March 2014, with a potential deferred consideration capped at £800,000.
It could also rely on the amount of funds which come under the discretionary management of the group over the same period, with an additional deferred consideration capped at £500,000, giving a maximum potential consideration of £1.3m.
On 31 July 2009, Merchant Securities had £85m under advisory management and a further £6.5m under discretionary management.
The acquisition increases the total funds under management to over £135m and could boost the funds under the group's discretionary management to over £50m before future growth.
"This acquisition fits well with our strategy to increase long term recurring income across our three sectors of private client, institutional and corporate finance and corporate broking business," Merchant Securities chief executive Patrick Claridge says.
"We will continue to seek appropriate ways of expanding the group, with an emphasis on increasing long term recurring income and delivering a high-quality service to our entire client base."
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