Sipp provider London & Colonial has been bought in a deal worth up to £5.4 million.

STM Group, an AIM-listed financial services company, has acquired the business, it announced to the Stock Exchange today.

London & Colonial reported audited revenues in the twelve months to 30 September 2015 of £3.83 million, a loss before tax of £0.07 million and net assets of £4.8 million.

It is the latest in a string of takeovers in the Sipp sector recently, with Mattioli Woods acquiring MC Trustees, Embark purchasing Rowanmoor and , Praemium‘s deal for Wensley Mackay.

Sipps professionals have been predicting greater consolidation in the market as the new capital adequacy rules took effect from the start of this month.

London & Colonial, based in Haywards Heath, also offers QROPs in Gibraltar and with an insurance business based in Gibraltar.

Alan Kentish, chief executive of STM, said: "We are delighted to announce the acquisition of London & Colonial Holdings and its subsidiaries which will result in a considerably strengthened and enlarged group. The transaction is a win-win outcome for STM and L&C.

"London & Colonial is a very well respected name within the industry where there are a number of current opportunities that can be accelerated with STM's resources and critical mass in the QROPs market.

"Not only does the Acquisition get STM a foothold into the UK SIPP market, it also brings with it a number of bolt-on consolidations in the QROPs and Life Assurance business. These will bring STM further economies of scale and will potentially free up regulatory capital in the medium term to fuel further growth."

Robin Ellison, chairman of London & Colonial Holdings, said: "We have over the years grown LCH in a forward thinking and innovative manner, and are delighted that STM share our vision of the future.

“We recognise that STM's enviable distribution network will allow LCH's businesses to flourish more quickly than could be achieved by LCH's existing management and network."