Johnston Financial is poised to next month complete the MBO process, which will see founder and chairman Adrian Johnston sell his remaining 27 per cent stake to business partner John McArdle.
It comes as the company outlines plans to rapidly accelerate growth, aiming to more than double it assets under management from £420 million to £1 billion by 2024.
The MBO, negotiated by legal firm Rooney Nimmo in Edinburgh’s West End, has been funded from retained profits.
McArdle claimed the new management structure will usher in a “period of evolution” for the firm, which offers a full suite of financial planning services.
He said: “Adrian started the business from one room in an office in Northumberland Street back in the 1980s. We are still in Northumberland Street today, but now have 2,000 active clients, a turnover of more than £2m a year and occupy three floors of the same building.
“It’s testament to his vision and talent that the company has built not only such deep and loyal client base, but also a strong and talented 18-strong team. All of this gives us the perfect platform to evolve and grow even further.
“After such an impressive career, it was only right that we made sure succession was also going to be as smooth and seamless as possible. Indeed, we’ve been speaking with our clients about this for many years to prepare them.
“What’s most pleasing is that this allows Adrian to keep an active role in the company as he winds down until retirement.”
Johnston, who established the company in 1987, will retain his position as chairman.
McArdle, who joined the firm in 1997 as a financial planner, rose through the ranks to become a 50-50 shareholder with Johnston before taking on the role of managing director in May 2018.
He will now own 90 per cent of the company, while director Suzanne Gray will hold the remaining 10 per cent of shares.
McArdle indicated the business will be making future hires to support its planned expansion, adding: “Suzanne’s elevation to become a shareholder is a clear statement of our ambitious intent and we’ll be bringing on board other talent to ensure we continue to grow.
“We are a well-known name in the financial sector. However, in terms of the wider public we have rather flown under the radar. Now the time is right to switch things up.
“It will be a period of evolution, not of wholesale change. The company holds chartered status which is the gold standard for our industry and does a lot of things extremely well.
“We intend to build that and are highly optimistic about the next chapter for Johnston Financial.”