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Canaccord strikes £80m deal to buy Hargreave Hale

Giles Hargreave and the wider fund team will remain with the business.

Canaccord strikes £80m deal to buy Hargreave Hale

Canaccord Genuity Group has struck a deal to acquire Hargreave Hale in a deal worth up to £79.5 million. 

It is the third merger in the fund management space over the last year, following deals betweem Aberdeen Asset Management and Standard Life, and Janus and Henderson

Hargreave Hale chairman Giles Hargreave (pictured) will remain with the new business, along with the wider fund management team. 

'The senior management of Hargreave Hale will continue to have significant involvement and influence, holding key leadership roles within the enlarged group and will be responsible for driving the growth and development of the investment and wealth management business, Canaccord said in a statement.

Canaccord Genuity Wealth Management (CGWM) wealth chief executive David Esfandi said he was very impressed by the quality and calibre of people within Hargreave Hale.

'The strategic rationale for this acquisition is underpinned by it being complementary rather than duplicative,' Esfandi (pictured below) said. 

'We are committed to investing in and accelerating the growth of Hargreave Hale’s fund management and private client wealth management operations for the benefit of the clients, staff and shareholders of both firms.' 

An initial £52 million and an additional consideration of £27.5 million dependent on certain performance targets being met over three years. The deal will be part funded by a £40 million loan from National Westminster Bank and HSBC.   

Hargreave Hale, which can trace its roots back to 1897, offers wealth and fund managment services, alongside stockbroking services to around 14,000 private clients, intermediaries, corporations and charities. It has £8 billion in assets under management and the combined group will have £22 billion. 

The firm has invested in increasing its regional presence in recent years and now has nine offices located in Bangor, Blackpool, Carlisle, Lancaster, London, Norwich, Nottingham, Worcester and York.

In the 12 months to the end of March Hargreave Hale recorded a total revenue of £48 million and a net income of £4.4 million. Ebitda, excluding deal-related and other non-recurring costs, stood at £8 million. 

'The acquisition of Hargreave Hale is an important step in our strategy of building a leading independent global wealth management business,' Canaccord president and chief executive Dan Daviau said.  

'We view this transaction as a significant development in our long-term strategy of transforming our business mix to grow contributions from our global wealth management businesses, and one that will deliver enhanced value for our clients and our shareholders.'  

Giles Hargreave, who owns 3.63% of the business, added:  'With its similar business model, shared culture and common values, Canaccord Genuity Wealth Management in the UK represents the ideal partner to continue the successful growth and development of our business.

'Along with our senior management team, I look forward to working with our new colleagues as we continue to deliver excellent investment and wealth management services for our clients.' 

The deal remains subject to approval from regulators and Hargreave Hale shareholders. The include Investec, which owns a 31.9% stake alongside joint managing directors and former Wealth Manager cover stars Stuart Brookes (above left) and Lee Finlayson (above right), who each own 3.3%.

 

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