Equity Trustees (EQT Holdings) has announced it is to acquire Australian Executor Trustees (AET) from Insignia Financial in a deal worth $135 million.
A statement to the Australian Securities Exchange said the acquisition will be funded through a combination of debt and equity, including $125 million from an equity raising.
“This is a transformative acquisition that enhances Equity Trustees’ capability in private client trustee services while growing shareholder value,” said Carol Schwartz, chair at EQT.
“AET is a strong strategic fit with Equity Trustees,” added Mick O’Brien, managing director at EQT.
“The business is highly complementary and provides geographic diversity, establishing a presence in Adelaide and significantly increasing our presence in Western Australia, as well as expanding our presence in Queensland and New South Wales.”
O’Brien said that this “well-recognised provider of professional client trustee services within Australia”, should deliver significant growth for Equity Trustees, adding $5.4 billion in funds under management, administration, advice and supervision (FUMAS), and boosting its overall revenue and EBITDA by more than a third.
“It adds scale to our Trustee and Wealth Services private client offering, particularly in our Indigenous and health and personal injury businesses, and supports our ongoing commitment to investment in products, services and technology,” the managing director said.
According to the market statement, in FY22, AET oversaw more than $6.9 billion in FUMAS, while on a standalone basis, it generated revenue of $38.1 billion over the same time period.
The acquisition is expected to close at the end of November, subject to ministerial approval to acquire AET’s trustee licence.
Separate to the acquisition, EQT also announced a 12.5% increase in net profits for the year ended 30 June, to $24 million. Meanwhile, FUMAS reached $148.9 billion, an increase of 3.3% from the year prior.
“This is an outstanding performance, achieved in an environment that continues to be impacted by the ongoing effects of Covid-19 and substantial market volatility,” said Schwartz.
“Equity Trustees has now delivered higher dividends in five of the last six years, after maintaining the dividend in the 2020 Covid-impacted year,” she added.
