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Tavistock Investments set to acquire Financial Ltd parent

Tavistock Investments is on the brink of acquiring Standard Financial Group, the parent company of network Financial Ltd.

The investment firm has entered a ‘conditional contract’ to buy Financial and has raised £2.7m to provide “additional regulatory and working capital for the acquisition”.

The network was banned from recruiting new ARs and individual advisers for four-and-a-half months in July last year after the FCA identified “systemic weaknesses” in its systems and controls.

Tavistock will initially pay £500,000 for the business, with current Financial owner Charlie Palmer buying IFA Compliance Ltd, a subsidiary of Financial, for £52,000. The remaining £448,000 will be used to “repay outstanding inter-company loans owed by IFAC”. Palmer will leave Financial once the deal has completed.

Tavistock will then provide Financial with a further £500,000 of extra working capital and undertake to provide an additional £500,000 of funding if required.

Tavisock will also pay a deferred consideration to Financial equal to £2,000 for each adviser who remains with the group from the date of completion until 31 March 2016. The maximum possible value of this deferred consideration would be £602,000.

Speaking to Mortgage Strategy’s sister title, Money Marketing, Tavistock chief executive Brian Raven says the acquisition is a “done deal”. Asked about Financial Ltd’s previous regulatory failures, he says: “I have concerns every time I do a deal and, when you learn a company has had difficulties with the regulator, clearly you are cautious. 

“We have engaged in extensive due diligence and this business has been led by a new senior management team since 2013.”

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