Palatine buys Towergate IFA arm for £14m

Greg Gille
06 March 2015

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Palatine Private Equity has acquired Towergate Financial, the IFA arm of insurance broker Towergate, for a total of ТЃ14m.

The deal valued Towergate Financial at £8.64m - the remaining capital will go towards financing the financial separation of the two businesses, investments to promote further growth, and the improvement of the company's systems.

Towergate divested the division to de-risk itself from future issues in the IFA sector, particularly with regards to pension schemes. The company was earlier this year expecting to pay £65–85m in potential redress costs linked to past advice Towergate Financial gave to customers regarding enhanced transfer values (ETV) and unregulated collective investment schemes (UCIS), according to unquote" sister publication Insurance Age. An FCA investigation is ongoing.

Towergate initiated the sale process for the division in late-2013 and further delayed the sale earlier this year while undergoing a restructuring, according to unquote" sister title Professional Adviser.

The sale is expected to complete by 20 March. Palatine Private Equity was unable to comment further at this stage.

Advent International wrote off its £200m investment in Towergate in February, as the company finalised a rescue deal with bondholders. Towergate's restructuring saw its senior-secured lenders paying £1 in a debt-for-equity swap, taking control of the company and reducing its £1.05bn debt pile.

Company
London-based Towergate Financial provides financial advice to individuals and corporates. Its services include mortgage, life insurance, employee benefits and corporate protection advisory.