Interactive Investor, Britain’s second-largest direct-to-consumer share trading platform, is on the verge of another strategically compelling takeover with a deal to buy the retail business formerly known as Selftrade.
Sky News has learnt that II is close to announcing the purchase of EQi, a division of the FTSE-250 support services group Equiniti.
City sources said this weekend that II had agree to pay in the region of £50m for EQi.
The deal would be the latest in a string of acquisitions by II, which has thrived amid booming activity among retail investors in the stock market both before and during the COVID-19 crisis.
One insider said the EQi deal would represent another logical step towards what could be one of London’s most hyped stock market flotations of the next 12 months.
II currently has approximately £36bn in assets under administration (AUA), making it the second-largest platform of its kind behind Hargreaves Lansdown.
The company, which is based in Manchester, boasts around 300,000 customers and a 500-strong workforce.
Run by chief executive Richard Wilson, past acquisitions have included TDDI, Alliance Trust Savings and, more recently, Share Centre, which added more than £6bn in AUA.
Mr Wilson’s success at integrating businesses that II has bought has enabled it to rapidly grow profits in recent years.
II charges a flat fee structure, unlike some rivals, and recently marked its 25th anniversary.
One person close to II said it had traded strongly throughout the pandemic, pointing out that its platform had not – unlike others’ – encountered technical glitches on the day that the first coronavirus vaccine was announced in November.
The company’s biggest shareholder is JC Flowers, the financial services-focused private equity firm, with Mr Wilson and his management team also expected to be big beneficiaries of any eventual ‘exit event’.
It was previously a public company, having originally floated during the original dotcom boom.
Mr Wilson told The Times last year that an IPO was a logical step for a consumer-facing financial services company of II’s scale.
Notable corporate activity in the sector has included Morgan Stanley’s purchase of E-Trade and the London flotation of AJ Bell.
EQi was previously known as Selftrade, and was bought by Equiniti in 2014.
Its latest sale marks a further disposal for Equiniti, which announced this month that it was appointing a new chief executive.
II declined to comment on Sunday, while Equiniti could not be reached for comment.