UK-based Harwood Wealth Management Group has acquired Southampton-based independent financial advisory (IFA) firm AE Financial Services for £4.6m ($6.42m).

As per the terms of the agreement, an initial consideration of £2.4m plus cash balances was paid on completion.

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Subject to AE Financial achieving certain performance criteria, a further deferred consideration of up to £2.2m will be paid in two tranches over next 24 months, Harwood said.

AE Financial Services, jointly owned by David Hayward and Michael Wright, reported unaudited revenue of £1.3m and unaudited profit before tax of £0.5m for the year ended 31 December 2017. The business has assets under influence of £130m.

AE Financial will continue to operate as a standalone brand and Hayward will remain with the company.

Harwood said that the acquisition provides it with a “strategic hub” in Southampton and “enhances the Group’s already established and growing presence along the South Coast”.

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Hayward said: “We are very pleased to be joining such a well-respected and successful Group. I am confident that Harwood will be a perfect fit for our team and allow us to develop the business and continue to provide high quality and dedicated advisory services to our clients. We very much look forward to joining the team.”

Harwood Wealth Management non-executive chairman Peter Mann said: “AE Financial is a strong addition to the Group and we look forward to welcoming both the team and clients to Harwood Wealth.

“As well as further augmenting our presence in a key area of the UK, this acquisition continues to build upon our successful model of acquiring IFA firms who share our values and culture.”

The deal has been approved by the FCA.