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Towergate paid £17m for four IFAs over two years

Towergate Partnership spent £17 million on adviser firms over 2008 and 2009, according to its accounts.

Towergate Partnership paid £17 million for four financial advice firms it acquired in the past two years.

The insurance broking giant put the highest valuation, £5.35 million, on North East-based advisers Paramount Group which it acquired in September 2008.  

Towergate Partnership bought Paramount, now known as Towergate Financial North, when its adviser consolidation vehicle Towergate Financial Services went into administration in June 2009. The advice arm was rolled into main insurance business.  

The report valued Towergate Financial Scotland, formerly Albannach Financial Management, at £4.89 million. Towergate Financial East, or M2 Financial before it was acquired in August 2008, was given £3.8 million goodwill value, according to a report filed to Companies House.  

The lowest valuation of £2.94 million was put on Towergate Financial West, which was TBH Financial Services before its sale to Towergate in December 2006.  

Towergate has recently frozen a £665 million bond issue due to market fears about a sovereign debt default.

Towergate had hoped to refinance its debt facility with more favourable terms and provide more funding for acquisitions.

'Bond market conditions have obviously worsened significantly since we launched the offer and, for the moment, it is not cost effective to pursue the offering,’ stated Andy Horner, group chief executive of Towergate.

Ian Darby, chief executive of Towergate Financial, said on future plans for acquistions.

'We have a healthy pipeline of acquisition targets and indeed have already made some significant buys in 2010.  John Charcol is a perfect example of a tremendous business which will help us grow both our customer base and profitability,' he said.

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