The merger of Tilney and Smith & Williamson will now go ahead following a revised transaction structure for the deal.
The merged group will be known as Tilney Smith & Williamson and will be the UK’s leading integrated wealth management and professional services business.
As part of the revised transaction, funds advised by Warburg Pincus LLC, a global private equity investor, will co-invest in the combined business alongside funds advised by Permira.
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 combined business will be responsible for approximately £44 billion in assets under management and, on a pro forma basis, will generate circa £530 million of revenue.
Ranked by assets under management, Tilney Smith & Williamson is expected to be the fourth largest UK wealth management business and, measured by fee income, will be the sixth largest UK professional services firm.
David Cobb and Kevin Stopps, Co-Chief Executives of Smith & Williamson, comments: “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.”
Chris Woodhouse, Chief Executive of Tilney, comments: “I am delighted that we have agreed terms on a revised transaction structure. This transformational deal brings together two highly complementary and successful businesses, with shared values of focusing on our clients and high standards of professionalism.”