Shares in troubled wealth manager and Financial Planner Kingswood have been cancelled on the AIM market with effect from today as the full £48m takeover of the business by its PE owner HSQ moves to its final stages.

The move effectively takes the company, which has struggled with debt management, into private ownership.

Kingswood warned recently that it may run out of money to service its £91m debt pile. In recent times it has needed several cash injections to repay loans.

This week Kingswood reported that HSQ had acquired 99.27% of Kingswood's existing share capital through its takeover offer.

Private equity firm HSQ recently made an unconditional offer to buy the remaining 10% of shares in the business it did not already own.

HSQ offered 7p per ordinary share for the business, a slight premium over its previously traded price. The deal values the firm at around £48m.

HSQ is part of Pollen Street Capital which has substantial interests in financial services businesses. HSQ and Pollen Street are considering merging Kingswood's UK and Ireland business with another wealth management company managed and advised by Pollen Street, Mattioli Woods.

HSQ believes that the merger of its wealth management businesses could spur growth.

Kingswood Holdings Limited (trading as Kingswood) manages about £12bn of assets under advice and management. It services 19,000 clients from offices across the UK with overseas offices in Ireland, South Africa and the US.

Before being cancelled on AIM at its request, its shares slumped by a third this year, falling from 10.25p at the start of the year to their current level of 6.9p.

Around 20 years ago, after Kingswood's founding in 2004, the shares traded at 2,230p, but have been on a downward spiral since 2005, falling to around 58p in 2008 and failing to recover since. Prior to the takeover HSQ already owned 68% of Kingswood shares.

Recently HSQ provided a £5m debt facility to support Kingswood's “immediate funding needs.” It said the cash injection would enable Kingswood to “meet its immediate deferred consideration obligations."

Kingswood has seen strong growth in revenues and AUA/M since 2019 but admitted recently its performance had been hit by “headwinds” it says have also been seen across the sector.

Kingswood has acquired more than 20 firms, many of them Financial Planning businesses, in a rapid expansion drive in recent years.

David Lawrence, Kingswood’s CEO, quit the firm last July after overseeing much of the expansion. He was replaced by ex-Positive Solutions CEO and Chartered Accountant Peter Coleman as interim CEO.