Private equity firm HSQ has today confirmed its unconditional offer to buy the remaining 10% shares of the troubled Financial Planning business Kingswood and said it hopes to conclude the deal by 15 April.
Kingswood warned recently that it may run out of money to service its £91m debt pile and has needed several cash injections to repay loans.
HSQ has offered 7p a share for the business, a slight premium over the current price, which values the firm at around £48m.
HSC said: "Kingswood Shareholders are encouraged to accept the Offer as soon as possible."
HSQ is part of Pollen Street Capital and has substantial interests in financial services businesses. HSQ and Pollen Street are considering merging of Kingswood's UK and Ireland business with another wealth management company managed and advised by Pollen Street.
HSQ said it believes that the merger "has the prospect of delivering the long-term capital investment that the UK and Ireland operations requires which would provide all advisers and clients within these businesses an exciting opportunity for growth."
Kingswood Holdings Limited (trading as Kingswood) is an AIM-listed (AIM: KWG) wealth manager looking after 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.
Its shares have 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.
In a letter to shareholders David Hudd, chairman of Kingswood, recommended that they accept the HSQ offer. He said: "Action needs to be taken to ensure the long-term success of Kingswood, its employees and clients."
HSQ already owned 68.4% of Kingswood shares until recently but said earlier this month it would bid for the rest of the business at 7p a share. It now owns nearly 90% of shares.
Last week it provided a near £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.
As at 31 December, the unaudited gross debt of Kingswood from its senior debt facility, and the loans provided by HSQ and/or affiliates of HSQ since February 2024, amounted to £90.7m.
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.
