Berkeley Berry Birch, the Coventry group of financial advisers, has sold the business of subsidiary Berry Birch & Noble Financial Planning (Weston) to Bates Investment Services.
Bates will pay an initial £1 million, plus deferred payments based on renewals commission received, less the share paid to the self-employed independent financial advisers, for the year following completion.
Based on previous levels of these commissions, Berkeley Berry estimates the deferred payment will come in at around £100,000.
In addition, Bates has assumed liabilities with an estimated book value of around £450,000, largely for indemnity commissions and commission payable to Weston's IFAs.
There are also contingent liabilities for indemnity commissions which, if they crystallise, will be payable by Bates up to a maximum of about £400,000. The book value of the gross assets sold is approximately £1.25 million, including goodwill of £945,000 recorded in Berkely Berry Birch's balance sheet.
For the year to March, 2005, Weston reported turnover of £8.05 million and a pretax loss of £1.6 million.
Berkeley Berry Birch said it would use the proceeds of the sale of the subsidiary to meet its liabilities to its remaining creditors.
