LONDON, UK: XPS Pensions Group plc has acquired the entire issued share capital of Penfida Limited, the leading independent corporate finance and covenant advisor to UK pension funds for a total cash consideration of £11.6 million.

Consideration is comprising £7.9 million on completion and contingent deferred consideration of up to £3.7 million, subject to business performance and the continued employment of key employees.

The Acquisition includes all staff and contracts within the business and constitutes a Class 2 transaction for the purposes of the FCA’s Listing Rules.

Penfida Limited was established in 2005, with the mission of providing corporate finance advice mainly to pension fund trustees, both in respect of complex corporate transactions as well as regular covenant advisory work in connection with pensions schemes’ triennial valuations and monitoring.

Penfida has built up a substantial presence in the market as the leading independent specialist adviser, with clients representing in aggregate more than £300 billion of assets.

Under the pensions regulatory framework, all pension scheme trustees require actuarial advice, investment advice, administration services and advice about the strength of the sponsoring employer (referred to as the ’employer covenant strength’).

XPS Pensions has a strong offering in the first three of these areas, and a successful and growing employer covenant practice. 

Penfida’s business will be combined with the existing XPS covenant team, significantly boosting capability and giving critical mass in this important area. The acquisition will enable XPS to offer covenant advisory services to a wider range of XPS clients while Penfida clients and staff will benefit from access to the wider capabilities of XPS Pensions.

The business unit will be led by the current Penfida management team, including Senior Partner Paul Jameson, integrating within the wider XPS Group over time.

Penfida Limited generated profit before tax of £0.9 million in the year ended 31 March 2022. This is a statutory figure which is unadjusted for company-specific policies regarding profit distribution.

The Acquisition is expected to contribute to the Group approximately £5 million of revenue per annum at a 25% adjusted EBITDA margin. Gross assets were £3.6 million at 31 March 2022.

Paul Jameson, Penfida Limited Senior Partner, said: “We are delighted to be joining the XPS family, where the culture and values of the firm align with our own. As part of XPS we will be able to continue to provide independent advice to our clients and we will benefit from ongoing investment to enable the combined business to grow and thrive into the future.”