As part of the deal, Tavistock will become Titan’s strategic partner and distribute its products.
Tavistock Investments PLC (LON: TAVI) soared as it agreed to sell its fund management arm (TWL) for up to £ 40million to Titan Wealth.
The fund group will receive additional payments over a ten-year period equivalent in value to 50% of future net income on any fund grown under its brand ACUMEN.
As part of the deal, Tavistock will also become Titan’s strategic partner and distribute its products.
John Leiper, Director of Investments at Tavistock, and his investment team will continue to work closely with Tavistock and his advisers.
In its audited accounts for the year ended March 31, 2020, TWL reported pre-tax profit of £ 2.3million on gross income of £ 5.6million and gross assets of £ 5.2million. of pounds sterling.
Simultaneously, Titan is also negotiating to buy Global Prime Partners, an institutional services platform with £ 2 billion in assets under administration.
Tavistock recently abandoned a share offering approach from AIM-listed TEAM, which valued the group at 2.43 pence per share.
In his statement today, Tavistock said TWL’s sales to Titan were worth the equivalent of 6.58 pence per share.
Brian Raven, CEO of Tavistock, said: “This is a tremendous opportunity for both companies. While Tavistock Wealth is part of Titan, we will continue to work closely with our high performing investment team. The partnership with Titan confirms our business strategy and will allow us to accelerate the growth of our business and deliver maximum value to our shareholders. “
Tavistock has received irrevocable pledges to vote in favor of the sale of TWL from 50.56% of the shareholders.