Sipp provider and wealth manager Mattioli Woods plc has expanded its Financial Planning operations with the acquisition of  Thoroughbred Wealth Management and its subsidiary Atkinson Bolton Consulting.

Mattioli Wood says that the total consideration of up to £5.99 million will be met partly in cash and partly through the issue of 946,256 new ordinary shares of 1p each in Mattioli Woods. The cash consideration is payable in part on completion and in part over four years following completion, subject to certain earnings targets being met. The initial cash consideration is being funded from the group's existing resources which, net of deal costs and including estimated cash acquired in Atkinson Bolton, results in an estimated cash inflow at completion of £0.88 million.

TWM is the holding company of ABC, an employee benefits and wealth management business founded in 2001 with the aim of providing clients with bespoke financial services. Based in Newmarket, ABC employs 50 staff providing advice to both high net worth individuals and companies on all aspects of Financial Planning. In addition, ABC offers a full discretionary management service and operates its own Open Ended Investment Company, The IM Thoroughbred Funds ICVC. ABC has funds under management and advice of circa £420 million. ABC's management team will be retained by Mattioli Woods.

In the year ended 31 December 2012, TWM generated a profit after taxation and before shareholders' dividends of £0.61 million on revenues of £2.88 million. At 31 December 2012, TWM's consolidated net assets were £1.77 million (including net assets of ABC of £0.98 million).

Mattioli Woods says the acquistion enhances its existing employee benefits proposition at a time when the introduction of the National Employment Savings Trust (NEST) and auto-enrolment present clear opportunities. In addition, the acquisition offers the enlarged group the opportunity to extend the provision of Sipps to a wider audience and adds further specialist wealth management expertise to Mattioli Woods' existing operations.

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The total consideration consists of an initial consideration of £3.24 million (subject to adjustment for the value of net assets acquired), comprising £375,000 in cash and 946,256 ordinary shares in Mattioli Woods ("the Consideration Shares", which are valued at £2.87 million based on the closing price of a Mattioli Woods share on 26 July 2013), plus deferred consideration of up to £2.75 million payable in cash in the four years following completion if certain financial targets are met based on growth in earnings before interest, tax, depreciation and amortisation generated during that period. Application for admission to AIM of these 946,256 new ordinary shares has been made and it is anticipated that such admission will occur on 2 August at 7 a.m.

Commenting on the acquisition, Ian Mattioli, chief executive of Mattioli Woods, said: "The acquisition of Atkinson Bolton is an excellent cultural and strategic fit, offering real synergies with the wider Mattioli Woods Group. This is another exciting step forward in our development as a broader wealth management business and offers us the ability to provide additional value-added services to clients of both firms."

James Bolton, managing director of Atkinson Bolton, said: "We are proud of the business we have built over the last twelve years and excited about joining the Mattioli Woods Group."