Merit Financial Advisors has acquired a Washington state advisory firm that adds more than $542 million to its asset under management and expands its footprint in the region.
The Alpharetta, Ga.-based Merit, which has $10 billion in AUM, announced Wednesday it bought Viren and Associates, of Spokane. The advisory firm, founded by Paul and Beth Viren, specializes in retirement plans, life and disability insurance and group employee benefits. Paul and Viren’s team of two additional financial planners and client support professional will join Merit, which has 80 advisors. Beth will continue to support the organization informally, Merit President Kay Lynn Mayhue told Financial Advisor.
The Viren acquisition is Merit’s second of the year, but the firm indicates more deals will be coming soon. Mayhue said Merit has three deals under letters of intent. Management expects to close one at the end of this month and two at the end of June.
Merit, which is one of the most active acquirers in the RIA space, has completed 25 acquisitions since 2020. It typically looks for companies with between $1.5 billion to “a couple of hundred million dollars” in assets, said Mayhue, who suggested management isn’t having any problems finding potential deals.
“Viren is what I’d call Merit’s perfect partner,” Mayhue told FA. In addition to Merit’s ability to enhance the services Viren provides, the firm also looks for companies that might be close to activating a succession plan or is in one.
The official said Merit’s goal is to acquire $3 billion to $4 billion in assets this year and eventually to grow AUM to $15 billion by the end of 2024.
The firm has been on an acquisition tear since taking a strategic investment from Wealth Partners Capital Group in December 2020, becoming “a hybrid RIA M&A powerhouse,” as FA described the firm last year.
Merit’s deals comes amid a “healthy” M&A environment in the RIA space, DeVoe & Company recently reported. Higher interest rates and longer due diligence, among other factors, slowed the number of deals in 2023 from the prior year. Still, the 251 transactions last year nearly tripled the volume recorded five years ago, noted DeVoe.
“I love that our industry is focusing on non-organic growth, and that companies are coming together to be stronger,” said Mayhue, referring to non-organic as expanding through mergers acquistions and joint ventures. She expects the active M&A activity in the advisor sector to continue. Merit is in “the sweet spot (of M&A activity), looking for people who want their fingerprints on what we’re building.”
Viren evidently fits that bill. “The strategic partnership between Merit and Viren is a major milestone that sets Merit up for significant future success, specifically with the expansion of Merit’s qualified retirement plan and advanced insurance service offerings,” Tait Lane, regional director and partner at Merit, said in the press release announcing the deal. “I couldn’t ‘t be more excited about the future of Merit with the addition of Paul and his team as a part of our organization.”
Mayhue also suggested that the Viren deal furthers Merit’s goal of becoming the “RIA of the future.” Eighty to 90% of Merit’s asset growth over the years has been nonorganic or from acquisitions, she said, though the company still thinks organic growth is critical.
“It’s not smart to only grow through nonorganic” means, said Mayhue.
When asked if Merit itself has been approached over the years by another firm interested in buying it, Mayhue said, “Yes, we’ve had some companies and amazing investors” approach us.
“We entertain a lot of conversations; we get a lot of them," she said. “As of now they haven’t turned into anything.”
She added that the company isn’t in any “meaningful conversations with anyone that is looking to acquire Merit at this time.”
Management’s goal is “to keep doing what we’re doing,” Mayhue continued. “We’re not building to sell. We’re building to transform.”
In the meantime, an independent Merit will continue to rely in its current growth strategy.
“If we can continue to bring on great talent,” said Mayhue, “the sky’s the limit.”