Abrdn to buy Interactive Investor for £1.49bn

Investment manager Abrdn has confirmed plans to buy the direct to consumer financial platform Interactive Investor for £1.49bn. The deal has been widely rumoured over the past few weeks. Both firms have significant SIPP operations. The takeover opens the door to Abrdn to potentially begin offering Financial Planning and other wealth services to Interactive Investor’s 400,000 customers. Abrdn rebranded its 1825 arm as Abrdn Financial Planning in the summer. Abrdn says the deal to buy Interactive should, “significantly enhance our presence and growth opportunities within a fast-growing and attractive market.” Abrdn says the direct investing market is growing at 15% a year and this growth is forecast to continue. Interactive Investor has expanded rapidly in recent years. In March this year it bought rival EQi for nearly £50m and in 2020 it bought The Share Centre. Abrdn will acquire 100% of the ordinary share capital of the holding company of Interactive Investor from its shareholders, including private equity firm JC Flowers and key members of ii’s management for a total of £1.49 billion. The acquisition is subject to regulatory approval and Abrdn shareholder approval. Interactive Investor is a growing subscription-based platform with more than over 400,000 customers and AUA of approximately £55 billion. Abrdn says the deal is a “material step” towards its aim of being a leader in the personal wealth market with Assets Under Management and Advice increasing nearly fivefold to £69 billion on a pro forma basis. Abrdn says it is committed to Interactive Investor's standalone open-architecture, subscription-based revenue model for the long-term. As part of the deal, Richard Wilson, CEO of Interactive Investor, will join Abrdn and continue to lead Interactive Investor which will operate as a standalone business within Abrdn's Personal vector. The acquisition will increase fee-based revenue in Abrdn's Personal vector from £83m to £199m on a pro forma basis. Abrdn plans to offer its wealth services, including financial advice and Financial Planning, to Interactive Investor’s 400,00 customers. Abrdn said today: “Interactive Investor will be able to leverage Abrdn's trust, deep expertise in financial advice, meticulous research and global perspective. In combination, Interactive Investor's high-tech model broadens Abrdn's existing personal wealth offerings, from self-directed investing to high-touch Financial Planning and discretionary investment management.” The acquisition will be funded in cash from Abrdn's own capital. Interactive Investor is based in Manchester, with offices in London and Leeds, and has about 777 employees. The Interactive Investor group generated pre-tax profit of £41.7m for the year ended 2020 and had gross assets of £636m as at 30 June 2021. Stephen Bird, chief executive of Abrdn, said: “"This is a unique opportunity and a transformative step in delivering our growth strategy. interactive investor is the UK's number one subscription-based investing platform with a powerful reputation as a consumer champion. abrdn's scale, resources, and shared vision will enable interactive investor to grow confidently and expand its leadership position in the UK's attractive savings and wealth market. I am delighted that Richard Wilson and his team will continue to lead interactive investor." Richard Wilson, chief executive of interactive investor Limited, said: "This is an exciting new chapter in our history and means that we can focus exclusively on serving those who matter most: our customers. We will have access to abrdn's additional capabilities across research, advice and wealth management services, and we will benefit from being part of one of Europe's largest investment and wealth management firms, with a vision and values closely aligned to our own. “Our management will remain the same, and the same extraordinary team will continually develop our service and technology, while maintaining our subscription pricing, our whole of market choice and the same campaigning spirit and editorial independence." • This is a developing story. Please check back later for updates and reaction.

Abrdn to buy Interactive Investor for £1.49bn

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