IWLhas struck a deal to boost its stake in online broking group Sanford, moving up from around 5 per cent to nearly 10 per cent with options to further increase the stake to more than 17 per cent.
Under conditions of the agreement Sanford’s Virtual Broker product will be rebadged as VisiBroker and tied to IWL’s financial planning software VisiPlan.
IWL’s FundLink program and Sanford’s Plato II trading platform will also be integrated to create a full web based share order, settlement, clearing and allocation transaction system for use by financial planners.
The deal will also result in research from InvestorWeb being made available to the 1200 financial planners who are existing clients of Sanford and both groups mutually promoting the products and services of the other.
IWL would take an interest in Sanford via the purchase of 2.595 million shares at $0.18 per share which values the stake at $467,000 but the shares will be subject to a voluntary escrow period of three months to January 15, 2003.
However IWL have also been granted options to purchase a further 5.19 million shares at $0.19 per share, worth $986,000, exercisable until November 15, this year.
The purchase of the first stake would result in IWL holding 9.5 per cent of the Sanford and after the exercising of options the stake would be 17.4 per cent in the online broker at a total cost of $1.45 million.
If the whole deal goes ahead according to plans drafted under a heads of agreement IWL will also become the single biggest stakeholder in Sanford and as such the Sanford Board has extended an invitation for IWL chief executive Otto Buttula to join as a non-executive director.
The two groups have stated they are still in talks regarding the details of the deal but expect these to be concluded by late December. They have agreed however that IWL will still maintain a wide level of relationships with industry groups in regards to its platforms.
IWL has also indicated that despite its relationship with Sanford other broking groups would not be disadvantaged if involved in dealings with IWL.
