Life company and advice giant Quilter has agreed a deal with Lighthouse to buy the firm for £42.2m.
The deal will see Quilter and its advice arm Intrinsic grow to more than 3,900 financial advisers. Quilter is paying £46.2m in total for Lighthouse but the advice network has £4m excess cash on its balance sheet, so in effect be paying £42.2m
Lighthouse is perhaps best known for its affinity services, which sees means it is the preferred provider of financial advice to 23 groups, including the likes of The Royal College of Nursing & British Airways Club, which have a total of six million members.
Lighthouse made a £2.5m profit in 2018 from £53.5m group revenues, citing the "levelling out" of defined benefit transfers and a correction in UK and global financial markets as the reasons underlying its fall in group revenue. It also transferred its auto-enrolment business to Smart Pension back in January.
The AIM-listed company said the acquisition offered its shareholders the opportunity to realise their investment in full and in cash at an "attractive premium" to the value it had been trading at over recent months.
Quilter CEO Paul Feeney said: "At Quilter, our focus is on delivering good client outcomes and that always starts with advice. We are delighted to have agreed a recommended cash offer for Lighthouse and look forward to their advisers joining the Quilter family.
"As the advice market consolidates, the strategic acquisition of Lighthouse will help secure Quilter's position as the place to go for trusted financial advice in UK."
Lighthouse chairman Richard Last added: "We have continued to make good financial and strategic progress in recent years despite softening market conditions and a tougher regulatory backdrop. However, the board believes that Lighthouse will benefit significantly from becoming part of Intrinsic and the wider Quilter group and will be better positioned to deliver an enhanced customer proposition and offer increased opportunities to current staff and advisers that will be available within a larger group.