London AIM-listed, Guernsey-based wealth management firm European Wealth Group (EWG) is to double in size with the acquisition of a US broker dealer platform, Newbridge Financial.
When the acquisition of Newbridge completes, the combined entity will be re-branded as Kingswood, EWG said in an announcement on Tuesday.
The deal is subject to approval by US regulator Financial Industry Regulatory Authority, and is expected to complete later this year or early in 2018.
The deal is being structured as an acquisition by EWG of an entity called KPI US Holdco Inc, through a complex arrangement that is subject to KPI US having become the 100% owner of Newbridge Securities Corporation and Newbridge Financial Services Group.
Florida-headquartered Newbridge has a network of more than 220 advisers, with around US$1.7bn (£1.3bn) in assets under management.
The deal will at a stroke double EWG’s AUM to around US$4bn, with 20,000 clients on the re-branded platform, and give it access to all but one US state – Maine – the only one where Newbridge doesn’t have a licence.
Marianne Ismail, chief executive of European Wealth, pictured above, said the deal represented a “first key step” towards delivering “a profitable and differentiated strategy in the financial services arena”.
She added that further “accretive acquisitions” would be likely in the future, as the company looked to build its global position, product offering and AUM.
No change to US senior management team
Newbridge chief executive Leonard Sokolow will remain on the management team in the new company as chief executive of the US division, with current Newbridge president Thomas Casolaro also remaining in his post, EWG said in its announcement.
Financing for the acquisition has been arranged in the form of a convertible loan, underwritten by EWG shareholder KPI, according to the company.
Founded in 2004
The company now known as European Wealth Group was first incorporated in 2004, and admitted to the London Stock Exchange’s AIM in February, 2005, under the name Equity Pre-IPO Investments Ltd. It changed its name to European Wealth Group in 2013.
In May 2014, EWG completed the reverse takeover of European Wealth Management Group Limited and became a holding company.