Kingswood Acquisition Corp., the special purpose acquisition company (SPAC) sponsored by the major shareholders in British wealth management firm Kingswood Group and a sister company to Kingswood U.S., has closed on its merger with broker/dealer aggregator Wentworth Management Services. The deal takes Wentworth, which will now operate as Binah Capital Group, public, and it begins trading Tuesday under the ticker BCG.
The deal values the company at $208 million, and the combined entity includes 1,900 financial advisors and about $23 billion in assets under management. Wentworth President Craig Gould will serve as Binah’s new chief executive, while David Shane, the former chief financial officer of Sanctuary Wealth, will be the company’s CFO.
Larry Roth, lead director of the Kingswood SPAC and managing partner of RLR Strategic Partners, will not serve as executive chairman of Binah, as previous filings indicated.
“Since the prospective executive chair role was first disclosed in December 2022, a number of board appointments for Larry Roth and strategic engagements for RLR emerged that required Larry’s bandwidth and focus,” according to a source familiar with RLR Strategic Partners. “As a result, he decided to step back from the potential executive chair role, but he remains a significant shareholder in Binah Capital who is deeply supportive of, and invested in, the company’s future success.”
The Kingswood SPAC leadership team will be shareholders in the company, but not part of Binah’s management. Wentworth’s C-suite team will become Binah’s executive management team, reporting to Gould and Shane.
Wentworth has four broker/dealers, including PKS Investments, World Equity Group, Cabot Lodge and Broadstone Securities, across 535 offices in all 50 states. It has several advisor affiliation models, including a hybrid platform, independent registered status and a W2 model. The b/ds will continue to operate under their existing brands and management.
Gould said being public will provide advisors with an interesting alternative to the growing number of private equity-owned platforms. Binah sits at the intersection of the broker/dealer business, which is consolidating faster than ever before, and the RIA business, which continues to grow. Over 500 RIAs currently run their commission-based business through Binah’s broker/dealers.
“What we have built and continue to build is a platform company focused on where we think the industry continues to evolve,” Gould said.
The company will also now have the capital to pursue more mergers and acquisitions.
“Being public and being an alternative to private equity certainly allows us to look at transactions that perhaps my competitors at my size probably would not be able to look at or be able to have the means to be able to close,” Gould said.
Binah currently has clearing arrangements with Fidelity, Pershing, Raymond James and RBC. It’s also in conversations with First Clearing, but it hasn’t yet signed the contracts.
“The multiple broker/dealer platform is intentional, so that we could efficiently end up having the multi-clearing platform approach.”
Gould said there are no plans at this time to roll up the broker/dealers into a single entity. The firm does offer some shared services across the b/ds, including technology, accounting, operations and compliance.
Kingswood launched its SPAC in November 2020, announcing it had successfully raised $115 million in its initial public offering and would use proceeds from the public markets to invest in U.S.-based RIAs and wealth management firms. Roth, the former CEO of Cetera Financial Group, was brought in as lead director.
In July 2022, Wentworth entered into an agreement to merge with the SPAC.
The capital raised from the IPO will be used to clean up Wentworth’s balance sheet, hire more advisors and grow the business. An investor presentation outlined a number of Wentworth referral partners, including Dynasty Financial Partners, Fidelity, Charles Schwab and Focus Financial Partners.