Wealth boutique European Wealth has scrapped its plans to acquire US based broker dealer platform Newbridge.
The deal was initially struck in October 2017, which was going to be funded through a convertible loan of $17.6 million (£13.3 million) with an interest rate of 7.5% per annum, provided by Kingswood, a substantial shareholder in European Wealth.
Although the deal has fallen through, the company had previously said that the loan agreement with Kingswood would remain in place. Kingswood now holds 39.55% of European Wealth.
In an announcement today, European Wealth stated that it had started the final stages of commercial due diligence on Newbridge following the approval for the deal by US regulator Finra.
However it said that it could not come to an agreement with Newbridge on non-regulatory conditions to continue with the transaction and ‘mutually decided not to proceed with the proposed acquisition’.
Marianne Ismail, CEO, commented: ‘While we have decided not to proceed with the acquisition of Newbridge, we remain committed to our strategy and are ambitious to grow both organically and dynamically by acquisition in the US and Europe.'
The Newbridge acquisition was originally highlighted as a turning point for European Wealth, which is seeking to become a more global player. In an interview with Wealth Manager following the announcement, Ismail had claimed that Newbridge would be the first of a number of moves ‘to become a really global distribution platform’.
However, Ismail (pictured), who was appointed CEO under a year ago in September, is clear this is not the end of the road for European Wealth’s global ambitions.
She stated: ‘Since my appointment in September, we have conducted an extensive strategic review of the operating businesses and put in place a significant number of positive measures to position the group for growth, to markedly reduce operating costs and to grow AUM and recurring fee income.
‘As a result of the recent fundraising the group is debt free and well-positioned to take advantage of the long-term growth opportunities present in the global wealth management and financial planning market.’