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James Hay confirms Nucleus acquisition offer

9 February 2021

James Hay has confirmed it has made an offer to acquire Nucleus for a total consideration valuing Nucleus at just under £145 million.

Richard Rowney, chief executive officer, James Hay Partnership, said assuming the offer receives FCA approval and that of the Nucleus shareholders the intention is “to merge the operations of Nucleus and James Hay to create a leading financial planning and retirement focused adviser platform with the scale to enable greater investments in technology, products and service to meet the needs of advisers and their clients.”

The combined business will have the capability to service the entire adviser market with a wide range of financial planning and retirement needs, including leading SIPP and drawdown features among a range of tax wrappers (including ISAs, GIAs, onshore and offshore bonds).

Rowley continued: “The two businesses have complementary areas of expertise and common beliefs about the importance of independence and only serving the adviser market. We admire much about Nucleus and the skills within its team, and look forward to working with them to better serve the growing needs of advisers.

“By joining forces, we can combine Nucleus’s reputation for great digital user-experience and James Hay’s pension specialism, creating greater strength and a platform with the scale to invest and deliver real value.”

Nucleus has assets under administration of £17.4bn, which with James Hay’s AUA of £27.6 billion, will give the combined platform c. £45billion.

The Nucleus board has recommended that its shareholders vote in favour of this transaction and Nucleus’ largest shareholder Sanlam, which owns 52.19%, has agreed to do so.

Commenting, David Ferguson, CEO of Nucleus (pictured) said: “Since we launched in 2006 we’ve always put the customer centre stage and while that has made us a little bit different, it’s carried us to £17.4bn in AUA and to a point where the sentiment of our users and our people has never been better.

“Becoming part of this enlarged group gives us a key role in a much bigger story where we can create a leading independent platform of scale with a high tech, high touch proposition and philosophy. I think the combination of our people’s talents and the size of the opportunity can see us carefully navigate the roadmap to deliver on this collective medium-term goal.

“I look forward to getting to know our new colleagues and moulding a group culture that is centred on doing the right thing and building a market-defining product that really delivers for advisers and their clients.”

Commenting on the acquisition, FTRC director and technology guru Ian McKenna said: “My overall view is this is a good outcome for both parties. There are significant differences in their respective propositions that are complementary. The merged business will have significant scale which it might have been hard for each to reach individually through organic growth.

“Perhaps the biggest challenge to James Hay is how to maintain the exceptional culture of the Nucleus business and their outstanding relationships with advisers while forming a single entity.

“I think the most interesting deal will actually be the next one. We see platforms needing to evolve into a third wave delivering far wider functionality and creating additional value for both advisers and clients. They could choose to build such capability organically but I think an acquisition is far more likely as it will help him get new services to market more quickly.”

Subject to various approvals, the acquisition is expected to complete in the second quarter of 2021.

Separately, James Hay announced a “long-term partnership with FNZ for the provision of specialist platform technology and outsourced administration”. The partnership with FNZ will progress regardless of the outcome of the offer for Nucleus.

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