Mattioli Woods (MW) has acquired Doherty Pension and Investment Consultancy Limited, one of the largest financial planning and wealth management businesses in Northern Ireland. The business will add £635m of AUA and around 1,320 private clients to the MW group.
We remind readers that acquisitive growth is a core part of MW’s strategy. It has a long track record of success with 33 acquisitions (excluding Doherty) since its admission to AIM in 2005. Furthermore, the terms of this deal look sensible with the maximum consideration (subject to performance targets being met) being £15.05m on a cash-free debt-free basis.
With a host of revenue synergies that could be captured (a proven model from prior acquisitions), as well as some operational synergies, we think the price paid in relation to current earnings and future earnings potential is likely to be value accretive to the MW group.
We have not adjusted our fundamental valuation of 950p/share at this stage, but we shall revisit this with the end-FY23 trading update scheduled for 5 July 2023.
