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AIM-listed firm buys Sipp provider in £5.4m deal

Financial services company STM Group has bought London & Colonial in a deal worth up to £5.4m.

AIM-listed firm buys Sipp provider in £5.4m deal

AIM-listed financial services company STM Group has bought London & Colonial in a deal worth up to £5.4 million.

The deal follows a flurry of other acquisitions in the Sipp market in recent weeks, after Praemium bought Wensley Mackay, Mattioli Woods’ acquired MC Trustees and Embark purchased Rowanmoor.

London & Colonial has a UK Sipp business with around 2,000 members, as well as a Gibraltar-based life assurance business and a Gibraltar-based Qualifying Recognised Overseas Pension Schemes (Qrops) business.

The acquisition, which has already been approved by the Financial Conduct Authority, is for an initial consideration of £4.1 million with a further £1.3 million to be paid over the next 12 months subject to conditions.

The deal allows STM to gain access to the UK Sipp market and it will incorporate London & Colonial’s Qrops into its existing overseas pension business.

Robin Ellison, London & Colonial chairman, said the acquisition will mean the firm can grow quicker than under the current management.

‘We have over the years grown London & Colonial in a forward thinking and innovative manner, and are delighted that STM share our vision of the future.  We recognise that STM's enviable distribution network will allow London & Colonial businesses to flourish more quickly than could be achieved by London & Colonial’s existing management and network,' he said.

Alan Kentish, STM chief executive, said the deal would allow the company to expand and make a number of savings. In its announcement STM said it would make savings of £750,000 as a result of the deal.

‘London & Colonial is a very well respected name within the industry where there are a number of current opportunities that can be accelerated with STM's resources and critical mass in the QROPs market,' Kentish said.

‘Not only does the acquisition get STM a foothold into the UK Sipp market, it also brings with it a number of bolt-on consolidations in the QROPs and life assurance business. These will bring STM further economies of scale and will potentially free up regulatory capital in the medium term to fuel further growth.’ 

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