Private Equity House Invests Into UK Wealth Management M&A Deal

Tom Burroughes

1 June 2020

Global private equity house , investing into the new entity and significantly cutting its debt burden.

Under the agreement, the combined organisation will be known as Tilney Smith & Williamson. Funds advised by Warburg Pincus will co-invest in the combined business alongside funds advised by Permira.

The revised deal will provide a “significant reduction in external debt for the combined group”, as well as reduced ongoing financing costs and an improved regulatory capital position, the statement from the businesses today said.

“The new investment by Warburg Pincus, particularly in the midst of a global health and economic crisis, represents a significant vote of confidence in the strength of a combination of Tilney and Smith & Williamson and adds further credibility to the firm’s longer-term strategy,” the statement said.

Warburg Pincus has already invested in a number of financial businesses: Tilney Smith & Williamson will be Warburg Pincus’s sixth investment in a wealth management company.

AGF, Smith & Williamson’s largest shareholder, will now fully exit its investment in the group upon completion of the transaction. The overall transaction value for individual Smith & Williamson shareholders will be the same as under the original agreement. As before, Smith & Williamson’s management will be rolling the majority of their investment into the equity of the combined group.

Subject to regulatory and anti-trust consent and the approval of Smith & Williamson’s shareholders, it is expected that completion will take place in the second half of 2020, the statement said.

“The rationale for merging Smith & Williamson with Tilney has been persuasive from the outset, given the complementary strengths of the two businesses and the benefits of scale the combination will bring.

"The revised structure retains both these strategic benefits, as well as value for our shareholders, and delivers a more robust financial structure and a strong additional partner for the future in Warburg Pincus,” David Cobb and Kevin Stopps, co-chief executives of Smith & Williamson, said.