John Charcol/Towergate Financial
Catalyst advised Palatine Private Equity on its £14 million investment in support of the management buy-out (MBO) of the mortgage broking business, John Charcol, and the financial planning business of the Towergate Group.
Towergate Financial is a leading, national provider of financial planning and investment advice. The business has over 120 experienced advisors, serving more than 25,000 clients and approximately £1.2 billion of assets under advice. John Charcol is the UK’s leading independent mortgage broker. The London-based business has approximately 100 specialist advisors that, each year, write over 4,000 mortgages with a combined value of over £1 billion.
Palatine has backed Ian Darby and the existing management team of both businesses. In addition to funding the initial purchase price, these funds represent significant additional capital for the financial separation of the two businesses, investment in growth and the improvement of systems which will allow the management teams to continue to deliver high quality service levels to their private and corporate clients.
What difference did we make?
This was a highly complex deal involving two directly regulated Financial Services businesses spread across a number of statutory companies. Catalyst advised Palatine on entry pricing and negotiated a deal structure to achieve the objectives of multiple shareholders. Challenges that were overcome included the carve out of the two businesses from the vendor group, the incentivisation of the existing management teams (as well as the MBI candidates), direct FCA authorisation of the standalone businesses and complex tax planning.
Catalyst sat alongside the Palatine team supporting on all aspects of the deal, including the FCA regulatory process, and assisted in the production of a detailed business plan and financial model for the private equity investment process.