Moulton seals Finncap merger with firm founded by Tory peer

Sky News understands that the tie-up between Finncap and Cavendish will be announced on Wednesday, with the combined business seeking a public listing on London’s AIM stock market.

The deal will create an advisory and capital markets business with a value of roughly £45m, and reflect the ongoing impetus for consolidation in the market for servicing small-cap companies.

Mr Moulton ran the private equity firm Alchemy before founding Better Capital, which acquired businesses such as Reader’s Digest and Jaeger.

One of the City’s most recognised figures, he has chaired Finncap since buying the firm alongside its staff in 2010.

The merger with Cavendish, which specialises in advising entrepreneurs and company-owners on the sale of their businesses, will facilitate the provision of a broader offering to both sets of clients.

A flotation of the combined group, which is likely to take place in the coming months, will nevertheless come at a difficult time for London’s listings market, with several high-profile IPOs either being abandoned or performing poorly on their debuts.

However, sources close to the proposed deal described it as “a win-win” for the parties and their employees.

Regulatory reforms affecting the way brokers can charge for research has had a depressive effect on revenues for a string of mid-sized firms in the City.

That has spurred the likes of Santander, the Spanish banking giant, to explore a takeover of Peel Hunt, the independent broker.

According to its website, Finncap has nearly 120 corporate clients and claims to be the leading ?broker to AIM-listed companies.

Cavendish, meanwhile, celebrated its 30th anniversary this year with a party attended by Theresa May, the Prime Minister, underlining Lord Leigh’s close relationship with members of the Tory front bench.

Further details of the planned merger, including the leadership line-up for the combined firm, were unclear.

?Finncap and Cavendish both declined to comment on Tuesday night.

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