VouchedFor was purchased in a part debt funded transaction with a net upfront cash consideration of £7.5m – £6.5m of this was drawn from the group’s £80m revolving credit facility.
It was agreed under a contingent earnout arrangement, meaning VouchedFor will receive a payout if certain performance targets are met. This will be based on recurring revenue over the next two years and is capped at £10m.
The review site serves more than 5,000 intermediary clients and the acquisition is expected to broaden Fintel’s services to the advice sector. VouchedFor also recently launched an ‘elevation’ product to help firms monitor their Consumer Duty compliance.
The transaction for AKG was funded wholly from cash reserves with a net upfront cash consideration of £1.6m. There is an up to £400,000 contingent earnout based on certain trading criteria being delivered in the first three years of ownership.
Fintel’s subsidiary Defaqto will draw on resources from the parent company to invest in AKG and support its distribution.
Fintel said the acquisitions supported its aim to improve the retail financial services market to promote the value of advice and build consumer trust.
It is the firm’s third and fourth acquisition this year, following its purchase of learning and development provider Competent Adviser and tax specialist Micap.
‘Resilient earnings’ for this year
Fintel also provided a trading update with this announcement and said the core business continued to “deliver resilient earnings” in line with expectations for 2023.
It said the “ongoing pressures” in the UK housing market had been offset by its progress in software license sales and acquisitions.
Matt Timmins, joint CEO of Fintel, said: “Our positive trading momentum has continued into the second half, with continued growth in SaaS and subscriptions revenues, supported by our resilient, diversified revenue base.
“VouchedFor and AKG are two market-leading businesses which are highly complementary to our offering and share our vision. VouchedFor is the UK’s standard bearer for trusted advice while AKG has been at the forefront of financial strength ratings and consultancy for over 20 years. Both have strong adjacencies in terms of our capabilities and customers, and we look forward to further developing their compelling growth prospects.
“We continue to deliver growth organically and make progress consolidating the fragmented software market, providing efficiencies for advisers and creating better outcomes for all participants. With a strong merger and acquisition pipeline, underpinned by our balance sheet and cash position, we are confident in making further strategic progress.”
