Oval Financial Services closed three units before it sale to Gallagher

Arthur J Gallagher has sold Oval’s discontinued financial advice business to run-off buyer Randall & Quilter (R&Q).

The sale also included the Oval Financial Services legal entity, which was the independent financial advisory (IFA) division of broking group Oval, which Gallagher bought in April for £199m.

Before the sale, which took place on 30 June, Gallagher transferred the continuing business of Oval Financial Services and related staff to its UK-based employee benefits division, headed by Tim Johnson.

Oval discontinued three unprofitable units within its financial services business last year before the sale to Gallagher. These were Oval Pension Solutions, Oval Pension Administration and Oval Direct.

Johnson said: “We chose to divest the Oval FS run-off business and Randall and Quilter’s professionalism and integrity provide an excellent fit.”

R&Q bought Oval Financial Services and its discontinued business on 30 June as part of its broker run-off service.

The run-off buyer did not disclose what it paid for the business, but it is likely that it paid less than the acquired unit’s net assets.

The company acquired £2.8m in net assets in the deal, and recorded an identical amount of goodwill on its balance sheet.

R&Q said: “This goodwill on bargain purchase arises because the group is more efficient at managing such entities and former owners are prepared to sell at a discount on the fair value on the assets less liabilities.”