• Thu. Mar 28th, 2024

Royal Bank of Canada to buy U.K. wealth manager Brewin Dolphin

The deal will give the firm a No. 3 position in the U.K. market

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RBC Wealth Management has agreed to buy Brewin Dolphin Holdings Plc, in an all-cash deal that values the wealth manager at about 1.6 billion pounds (US$2.1 billion).

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RBC will pay 515 pence a share in cash for the company, according to a statement Thursday. The price represents a 62 per cent premium to Brewin Dolphin’s last closing share price.

M&A has swept through the wealth industry in the past few years as the rising cost of regulation, tech and operations push firms to merge. Several consolidators have bought advice businesses and wealth boutiques to gain scale. Brewin Dolphin is one of the U.K.’s most prominent wealth managers with 55 billion pounds of assets under management at the end of February.

“The U.K. is a key growth market for RBC, and Brewin Dolphin provides us with an exceptional platform to significantly transform our wealth management business in the region,” Doug Guzman, group head of RBC Wealth Management, said in the statement. The deal will give the firm a no. 3 market position in the U.K., he said.

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The combination would create a wealth manager with 64 billion pounds of assets under management and, based on 2021 earnings, combined annual revenue of 545 million pounds.

Brewin Dolphin has been expanding over the past couple of years. The wealth manager has been hiring staff for it ultra high net worth unit as well as other divisions in its London headquarters and across its regional offices. It has been recording net client inflows during the period.

Other notable deals include the merger between Tilney and Smith & Williamson in 2020 and Canaccord Genuity Wealth Management’s acquisition of the private client investment business of Scottish private bank Adam & Co from Natwest Group Plc in 2021.

Brewin Dolphin’s directors, who own 0.2 per cent of the company’s shares, plan to recommend the deal to shareholders. The acquisition will be implemented via court-sanctioned scheme of arrangement and, if approved, is expected to complete in the third quarter.

Bloomberg.com

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