XPS Pensions Group has acquired the entire share capital of Penfida Limited for a total cash consideration of £11.6m.

This includes £7.9m on completion, as well as a contingent deferred consideration of up to £3.7 million, subject to business performance and the continued employment of key employees.

XPS Pensions Group confirmed that the acquisition includes all staff and contracts within the business, constituting a class two transaction for the purposes of the Financial Conduct Authority's Listing Rules.

Penfida, an independent corporate finance and covenant advisor to UK pension funds, was established in 2005, and has clients representing in aggregate in excess of £300bn of assets.

The business will be combined with the existing XPS covenant team and is expected to “significantly” boost capability and provide critical mass, with the acquisition to enable XPS to offer covenant advisory services to a wider range of clients.

Penfida generated profit of £0.9m before tax in the year ended 31 March 2022, with the acquisition expected to contribute to the group approximately £5m of revenue per annum at a 25 per cent adjusted EBITDA margin.

The new unit will be led by the current Penfida management team, including Penfida senior partner, Paul Jameson, with plans to integrate with the wider XPS Group over time.

Commenting on the acquisition, Jameson stated: “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.”

Adding to this, XPS Pensions Group co-CEO, Paul Cuff, said: “Penfida is a business that we have known and admired for a long time. We have seen first-hand the high-quality service they provide when we have worked on clients we have in common.

"We are excited to welcome their fantastic team. Their expertise complements our existing strong and growing covenant business and means we can offer a market leading service to current and future clients across the entire spectrum of services that they need.”

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