Iress has announced it will divest its superannuation business as the latest step in its transformation program, allowing it to focus on wealth management.
The software firm has entered into a binding share sale and purchase agreement to divest the arm to global financial services provider Apex Group.
The software firm said the divestment to Apex Group came with the realisation that it was “not the natural owner” of a regulated superannuation services provider. However, it maintained there is a role for Iress to play in delivering its advice and education software to super funds and their members.
Completion is expected in the second quarter of 2025 and structured to release $40 million in cash consideration plus additional payments of up to $20 million over 12 months subject to agreed revenue milestones.
Following completion, Iress will continue to provide certain services for a period of up to 18 months to assist in the transition of the superannuation business to Apex Group’s ownership.
In August 2024, the firm had appointed Insignia Financial’s former general manager of master trust and insurance products, Sam Wall, as its newest CEO of superannuation.
Iress group chief executive, Marcus Price, said: “As part of our transformation, Iress has streamlined its operations to focus on our core strengths in software delivery and to exit businesses with a higher regulated service profile.
“Apex Group is recognised as a global leader in the provision of fund and asset servicing to regulated financial services businesses. We are delighted with this outcome, which is a great result for all parties – clients, employees and shareholders – and will see the superannuation business strengthened under new ownership.
“Importantly, Iress will continue to play an important role in the growth of the superannuation industry through the provision of advice and education software to funds and their members.
“Today’s announcement enables Iress to double down on our core markets and customers in wealth, trading and market data, while continuing to improve our operational strength underpinned by a robust balance sheet and improved earnings profile.”
Apex Group founder and CEO, Peter Hughes, said: “We are very pleased that Iress’ superannuation team and clients will be joining the Apex Group. Increasing member engagement and improving the member experience is a focal point of our industry. The Acurity platform is well-recognised as a market leader, and we look forward to building on this ensuring readily available access to data and flexibility in order to support clients to increase their efficiency, scale and value to members.”
The firm’s transformation project of “reset, refocus and build” was first announced in April 2023 and covers six areas:
- Structure for accountability and improved performance.
- Reset the costs and asset base, including headcount reduction and asset realisation.
- Refocus on the core of wealth management, trading and market data, and superannuation.
- Manage portfolio for value.
- Finish technology uplift, including transition to platform architecture and cloud optimisation.
- Build a new business.
At the time, Price said: “It’s clear that change is required to guide Iress to its next growth horizon. Our objective is to remain at the forefront of our chosen industries in our chosen markets where opportunity abounds.
“We are on the cusp of a new era and it’s our job to step into that and drive the change necessary in the industry.
What we aspire to be is a company with the attributes of higher growth and EBITDA margins that rates among leading global technology peers.”
