Fintech specialist Fintel (FNTL) issued an update on two recent acquisitions - VouchedFor via Fintel IQ and AKG by Defaqto.
VouchedFor was acquired by Fintel IQ, which is Fintel's technology and knowledge platform. VouchedFor is a review site for financial advisers, mortgage advisers, solicitors and accountants, serving over 5,000 intermediary customers.
Completed in November 2023, the transaction was part debt funded with a net upfront cash consideration of £7.5m, of which £6.5m was drawn from Fintel's £80m revolving credit facility. A contingent earnout, based on a multiple of recurring revenue generated over the next 2 years, is capped at £10m.
AKG was acquired by Defaqto, Fintel's Fintech and Research division. AKG is a provider of independent assessments and ratings of financial strength for a range of organisations, including life companies, investment platforms, and discretionary fund managers.
Completed in November 2023, the transaction was funded entirely from cash reserves with a net upfront cash consideration of £1.6m. In addition, up to £0.4m contingent earnout is based on certain trading criteria being delivered in the first 3 years of ownership.
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Fintel has announced two key acquisitions, highly complimentary to its existing offerings, aiming to bolster the growth of its SaaS and recurring subscription-based revenues.
VouchedFor should expand Fintel's services in the advice market through its technology and regulatory services platform. Fintel said it would invest in VouchedFor going forward to further accelerate its reach. The review site recently launched a new "Elevation" product that helps firms monitor Consumer Duty compliance, which is expected to complement Fintel's current offering and drive material future growth. The business is currently break-even after a period of investment.
Similarly, AKG should further extend Defaqto's portfolio of ratings and reviews for financial services. Fintel said Defaqto would draw on resources from across the company to invest in AKG and accelerate distribution of its proposition, both within sectors that it currently operates and adjacent areas.
VouchedFor and AKG mark the 3rd and 4th acquisitions by Fintel this year, following the acquisitions of learning and development provider Competent Adviser, and tax efficient investing specialists Micap, completed in July 2023. With strong momentum into H2, Fintel expressed confidence in continuing to deliver progress, supported by its robust balance sheet and positive M&A pipeline.
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