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Wealth boutique to buy US firm to 'accelerate growth'

Wealth boutique to buy US firm to 'accelerate growth'

European Wealth has proposed a name change following the acquisition of a US based company. 

In a deal with several complex layers, the group said it will acquire KPI US Holdco, which will in turn buy US-based national broker dealer platform Newbridge. 

European Wealth will fund KPI's purchase of Newbridge through a convertible loan of $17.6 million (£13.3 million) with an interest rate of 7.5% per annum. 

The loan, provided by Kingswood which owns 39.99% of European Wealth, will be repayable three years from the date of approval by the Financial Industry Regulation Authority (Finra). 

'We are confident that the proposed acquisition will allow us to accelerate our growth path towards our stated ambition of becoming a global vertically integrated financial services platform,' said Marianne Ismail, chief executive officer of European Wealth. 

'It will empower us to benefit from increased scale, enhance our product proposition and leverage operational efficiencies to attract more clients, and significantly increase our AUM.'

Following the acquisition the board has proposed to change the name of the company to Kingswood Limited. 

Back in June, Kingswood acquired a stake in the company, which issued around 48 million shares at 12.8p each to raise net proceeds of £8.8 million. The cash was raised to pay off European Wealth's debt. 

Following the acquisition of Newbridge, a company headquartered in Florida, the combined group is expected to have 20,000 clients and $4 billion in assets under management. 

Newbridge chairman Leonard Sokolow and chief executive Thomas Casolaro said: 'We believe that the proposed combination of our two businesses represents an exciting opportunity to grow a truly global business focused on delivering innovative products to our clients.

'European Wealth benefits from supportive shareholders, and with their backing, we can aim to rapidly build our product offering and global footprint, and ultimately, enhance our returns to shareholders.'

There have been a number of changes at European Wealth over the last year, as it accelerated global expansion plans. 

The London-based wealth firm signed a memorandum of understanding with an independent financial adviser firm in Singapore in June. This was preceded by the opening of a South African office in April after the firm acquired a £120 million client bank from Towry Asset Management

In September the company also announced that its chief executive John Morton, who was instrumental in establishing the company in 2010, would exit the firm. Ismail (pictured) took on the role on a permanent basis. 

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