As part of the deal Kingswood has merged its US investments, Chalice Capital Partners and Chalice Wealth Advisors, into Manhattan Harbor Capital in a deal valued at £3.1m.
The deal, along with an additional cash investment of £0.9m, increases Kingswood's interest in Manhattan to a majority with a controlling 50.1% position.
Kingswood is also expanding in the UK and earlier this month completed the acquisition of Surrey Chartered Financial Planner firm Regency Investment Services.
In the US Manhattan has been rebranded as Kingswood US and the company says the deal provides a robust base to “accelerate its US organic growth strategy.”
The company plans to pump in £6.1m of extra investment before December 2022 to further expand its US distribution by recruiting more advisers.
If all the investments are approved and fully deployed, Kingswood Group is expected to own approximately 68% of the integrated Kingswood US financial services platform.
Kingswood US comprises Independent Broker Dealer and Registered Investment Adviser businesses across the US with hubs in Atlanta, New York and San Diego. In addition, the US arm incorporates Kingwood Capital Markets, an investment banking platform.
Mike Nessim will continue as the managing partner of the enlarged Kingswood US business and leads a team of 184 Authorised Representatives managing approximately £1.4bn of client investments.
In the 12 months to 31 October MHC and Chalice delivered unaudited combined revenue of £22.7m and EBITDA £2 million.
To finance the deal, Kingswood has issued 928,400 new convertible preference shares, under an agreement with HSQ, a subsidiary of funds managed or advised by private equity firm Pollen Street Capital.
Gary Wilder, group CEO at Kingswood, said: "We are thrilled to have now achieved a majority interest in the re-named Kingswood US. I have no doubt the capital we deploy will drive exceptional growth across the Kingswood US platform.
“This investment is a major statement of intent regarding our US expansion plans and puts us in a strong position to deliver our US strategy. Mike and his team are highly talented, best in class operators in the IBD, RIA space and combined with Derek Bruton, who joined our US business with the Chalice acquisition, we now have exceptionally talented and experienced industry leaders to deliver a successful US strategy.”.
Mike Nessim, managing partner of Kingswood US, said: "This partnership with Kingswood has enormous potential, and we now have the backing to deliver the next phase of our ambitious business plan. The capital, team, infrastructure and technology is now in place to execute our ambitious US organic growth strategy."