Deals review – February 2015

Wednesday 18th March 2015

In partnership with the Business Desk, several of our experts will comment on significant deals every month. For February our head of corporate, James Fawcett, looks at the standout deal of the month which is Skipton Building Society’s sale of its wealth management firm Pearson Jones.

Standard Life’s acquisition of Pearson Jones looks like a smart move ahead of the far reaching pension reforms due to come into force in April. The fundamental changes being made by the reforms are driving unprecedented demand for advice.

In addition, the insurance industry needs to do something to replace the income it is expected to lose due to the loss of demand for the current annuity products. Those with a strong pensions advisory capability, such as Pearson Jones, are currently a highly attractive option to potential acquirers.

Buying a business of this type will enable the purchaser to enter into this particular market, or expand their offer on the back of the pension reforms.

From the perspective of Skipton Building Society, the sale of Pearson Jones is indicative of the mutual’s continued disposal of significant non-core business.

Last year, it sold mortgage servicing subsidiary Homeloan Management for £47.5m. The market in this sector continues to be stimulated by the ever increasing regulatory requirements for financial advisers and we at Gordons have seen a steady volume of transactions in the sector over the last couple of years.

Some of this activity is led by consolidation, demonstrated by the highly acquisitive approaches taken by consolidators such as Moneygate and Bellpenny.

Over the remainder of the year, it will be interesting to see how many other deals are driven by the changes in pension rules or other regulatory requirements. There are clear opportunities for certain businesses to benefit through sale or acquisition due to the reforms.

Yorkshire deals market overview Looking at the Yorkshire corporate deals market overall, it is encouraging to see that activity levels have remained strong since the start of the year.

Investors and funders generally continue to be supportive and, at Gordons, we are expecting a large number of transactions to complete over the next couple of months.