HUB24 to fully acquire Paragem
HUB24 has announced it will purchase financial planning licensee group Paragem after executing an agreement to acquire 100 per cent of the shares in the latter with the deal set to be concluded in a matter of weeks.
In an announcement released to the Australian Stock Exchange this morning HUB24 stated the total cost of the purchase would be broken into an initial cash payment, a deferred cash payment and capped earn-out consideration.
The initial cash payment of $1 million will be paid at completion with a deferred cash payment of up to $1 million paid after 12 months. A capped earn-out consideration of an additional $6 million will be subject to financial performance measured over three years and will be paid in HUB24 ordinary shares by late 2017.
Paragem, which currently, licenses 20 financial advice practices, was founded by Ian Knox and Charlie Haynes who will be retained by HUB24 and will enter into executive service agreements with similar remuneration and performance incentives to those of existing HUB24 executives. Paragem will retain its existing brands and the two businesses will continue to operate independently.
"Paragem's client base is well suited to Separately Managed Account (SMAs) investments that are professionally constructed and managed and we reviewed the entire market before determining HUB24 was the most suitable partner. We wanted to embrace an independent technology-based product provider at the forefront of SMAs and managed accounts, not one that was just thinking about the concept, " Paragem Managing Director Ian Knox said.
AUTHOR
Jason Spits
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