28 June 2024, London -- MAC II announces that its subsidiary, MAC II UK Limited has entered into binding agreements to acquire 100 per cent of the issued share capital of InvestAcc Group Limited ("InvestAcc"), a leading pensions services provider, for £41.5 million representing an enterprise value of approximately £36 million on a cash-free debt-free basis, partly funded via an equity fundraising aimed at a select group of institutional investors. On completion, MAC II is to be renamed InvestAcc.
MAC II was founded by Marwyn and Mark Hodges. Marwyn has a long track record of building UK public companies and creating industry leaders having launched twelve previous acquisition companies including BCA Marketplace, Breedon Aggregates and Entertainment One, and more recently Advanced AdvT and Zegona Communications.
MAC II’s strategy is to build the UK’s leading specialist pensions administration business in the public markets with an initial focus on the SIPP segment, a highly attractive investment opportunity. InvestAcc is the first and key step in executing this strategy.
InvestAcc is an award-winning provider of self-invested personal pension ("SIPP") and small self-administered scheme ("SSAS") services in the UK. MAC II believes that InvestAcc provides the optimal strategic platform to create value through a SIPP buy and build strategy. The business benefits from being a leading UK personal pension administrator, having a proven track record of delivering exceptional customer service, scalable operations and infrastructure, a strong financial profile and a sustainable organic growth trajectory. All of the management team, including the founder, are expected to stay with the business post completion.
MAC II Chairman Mark Hodges commented: “We have long admired InvestAcc Group, a leading UK personal pension administrator with a loyal and growing customer base. With a greater focus on savings, changing demographics and a growing reliance on the family, the pensions administration industry plays an important role in securing financial independence and security for customers over the long-term. Once completion occurs, we look forward to investing further in InvestAcc’s proposition and unlocking an ambitious M&A agenda to build the UK’s leading specialist pensions administrator”.
Will Self, CEO of MAC II, added: “We are thrilled to have announced the proposed acquisition of the InvestAcc Group. We have deep respect for Nick and his team and look forward to supporting the business during this exciting next phase of growth. We understand the market well and are confident InvestAcc is the perfect business on which to base our buy-and-build strategy. Our ambition is to bring their leading customer proposition to more people across the UK as the self-invested pensions market expands.”
Nick Gardner, founder and Managing Director of the InvestAcc Group, said: “I am confident that by working closely with Mark, Will and the team, we will see InvestAcc continue to grow and bring our brilliant offering to more customers around the UK. We will benefit greatly from their expertise to take our business to the next level and I’m excited for what comes next.”
Strategic Rationale and market opportunity
- InvestAcc is a highly scalable platform business: an award-winning provider of SIPP and SSAS services in the UK with a strong commitment to high quality customer service and outcomes. This is evidenced by their customer service score of 96 per cent, winning best pension service provider four years running between 2020 and 2023, and winning the best SIPP provider in 2023. The business provides the optimal strategic platform to create value, possessing scalable operations and infrastructure, a strong financial profile – generating £8.8 million of revenue and £3.6 million of adjusted EBITDA for FY23 – and a sustainable organic growth trajectory. The transaction represents a unique opportunity to develop the UK’s leading specialist pensions administration business with an initial focus on the SIPP Segment.
- Long term structural market growth: favourable macroeconomic trends and the evolution of the pension industry have created a drive towards personal pensions (including SIPPs). The total SIPP market assets under administration expected to grow at an 8% CAGR over the next 5-years from c.£500 billion to c.£750 billion.
- Excellent underlying business fundamentals: Full SIPP administrators typically have a customer retention rate of above 90 per cent., creating an ongoing fee-based revenue stream. The average SIPP plan lasts for more than 25 years, benefitting from embedded growth through contractual inflation-linked fees. Industry average EBITDA margins exceed 30 per cent with strong cashflow conversion.
- Near term M&A consolidation opportunity with a robust pipeline: there is a highly attractive M&A landscape for acquiring "Full" SIPP and "Simple" SIPP administrators across a range of sellers. Regulatory pressure, underpinned by a push for higher levels of consumer duty care, as well as vendor needs, are driving the sector to actively consolidate. MAC II has a robust pipeline primarily sourced directly by the management team who are in active discussions in relation to five potential acquisitions with vendors which combined could deliver more than £20 billion of AuA and 45,000 customers in 2024 and 2025.
- A sector leading team with M&A track record: the Company's management team have over 65 years of combined operational and strategic experience in the financial services and wealth sector, and have led multiple successful transactions. The MAC II management team are supported by Marwyn’s M&A and capital markets expertise, who have a track record of successful public market fund raises, having raised over £3.9 billion to date across 12 comparable vehicles delivering £4.9 billion in gross equity profits for investors.
The transaction is subject to the approval of the Financial Conduct Authority.
Media Enquiries
FGS Global
Rollo Head / Chris Sibbald / Sophia Johnston
+44(0)2072513801
Marwyn-LON@fgsglobal.com
About Marwyn
Marwyn has a long track record of investing in business across the UK, Europe and North America, partnering with exceptional, industry-leading management teams to develop industry leaders. Marwyn uses publicly-listed acquisition vehicles to identify and acquire platform businesses before pursuing buy-and-build strategies to create long-term value. This acquisition, via the MAC II vehicle, follows twelve previous acquisitions that have involved listed acquisition vehicles acquiring platform businesses that have undertaken ambitious buy-and-build agendas to create industry leaders across sectors. Examples include, Advanced Computer Software, BCA Marketplace, Breedon Aggregates and Entertainment One.
About InvestAcc
InvestAcc was founded in 1992 by current CEO Nick Gardner as DHC Brokers Ltd. Initially it serviced the financial planning requirements of one of Cumbria’s accountancy practises. The InvestAcc Group's flagship scheme is the Minerva SIPP which is a full SIPP allowing investment in any permitted standard asset. InvestAcc has two principal subsidiaries, InvestAcc Pension Administration Limited ("IPA") and Vesta Wealth Limited ("Vesta").
IPA offers SIPP and SSAS products distributed primarily via IFAs throughout the UK, with over 1,000 supporting advisers. IPA does not accept any non-standard assets into any of its schemes. The "SIPP Lite" scheme is a lower cost, simpler SIPP and allows investment in a single investment, such as a discretionary fund manager portfolio plus a bank account.
Vesta Wealth is a chartered financial planner that offers holistic advice to a wide range of customers. As at the Latest Practicable Date, it had 8 financial planners and 2 investment managers operating out of offices in Carlisle and Stockton-on-Tees. The majority of Vesta Wealth's clients are based in the North of England. It provides initial and ongoing advice via service agreements over £450 million of AuA including £105 million in its own range of risk targeted discretionary managed model portfolios on both a passive and active basis.