Insignia’s Hartley seeks to expedite 3-way M&A process
Insignia Financial chief executive Scott Hartley has confirmed multiple parties could progress to the second phase of due diligence if their bids are good enough.
The firm has received acquisition bids from Bain Capital, Brookfield and CC Capital for $4.60 cash per share. As a result of the evenly matched bids, all three parties have received access to limited due diligence.
Speaking on a webinar following the firm’s first half results for FY25, Hartley was asked how the firm was looking to progress the M&A process.
He said: “We have had three bidders and have provided limited due diligence to each of them. We have also done three presentations for them on different topics – strategy, finance and the SS&C deal. These are now complete and we have fielded additional questions from them, so we are now awaiting their reconsideration of the offer.
“There is no timeline on that, that’s in their hands now. We would like to see the process be expedited, but I would say we are close to done with the first phase of due diligence.”
Asked by subsequent analysts whether the firm has a strict deadline for revised bids, Hartley said this was not the case.
“We are not drawing a line in the sand. We have provided limited information to all three bidders to help them improve their offer, and if the bids are improved, then we will consider a second phase of detailed due diligence.”
Regarding whether the second phase of due diligence will be exclusive to only one bidder, Hartley said that “will depend on which party turns up with what”, indicating multiple bidders could be considered for the second phase if the bids are high enough or evenly matched.
For its half-year results, the firm announced a statutory net loss after tax of $17 million. However, the firm said this is an improvement from a loss of $50 million in the prior corresponding period, thanks to cost optimisation measures enacted during the period.
Average funds under management and administration (FUMA) increased by $25 billion to $320 billion, an increase of 8.6 per cent. Net revenue was up 1.5 per cent driven by strong markets.
Its optimisation program delivered net cost reductions of $36 million on the prior corresponding period and is on track to deliver full-year savings of $60–65 million ahead of schedule. This included a new operating structure, the IT separation of MLC, and pricing changes on its Master Trust to improve retention.
AUTHOR
Laura Dew
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