Sequoia expands with $3.1m acquisition

Sequoia financial group Garry Crole M&A

11 July 2023
| By Laura Dew |
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Sequoia Financial Group has acquired two advice firms for $3.15 million. 

In an ASX statement, the firm said it has signed a heads of agreement to acquire and merge Castle Corporate and Castle Legal.

The two businesses are described as “prominent and reputable firms specialising in providing accountants, financial advisers, and lawyers comprehensive advice and solutions relating to new and existing companies, trusts, and self-managed super funds (SMSFs)”. 

Sequoia said the acquisition aligns with the firm’s strategic vision of providing an extensive range of services to accountants, financial advisers, AFSL holders, and lawyers. 

It is expected to boost the EBITDA of the firm’s professional services division by $800,000 per annum.

The purchase consideration is up to $3.15 million and payable in cash and shares over two years post-completion with the final tranche payable in July 2025. The acquisition is funded by Sequoia’s strong cash reserves. 

Castle Corporate commenced business in 1992 with a stronghold among legal and accounting professions in Victoria. 

Founder, Jenny Hamley, and her team will join Sequoia in the professional services division and all employees will join the firm as part of the acquisition to ensure a smooth transition. 

Sequoia chief executive, Garry Crole, said: “We are delighted to have the Castle team join us and look forward to combining our expertise with that of Castle to drive innovation, augment the services on offer, and accelerate our growth in this area of our market.”

The firm has been especially active in the M&A space, helped by selling 80 per cent of its equities clearing business, Morrison Securities, to New Quantum. This meant the firm's cash at bank of settlement was expected to exceed $45 million this year. 

It has also acquired a 20 per cent stake in Euree Asset Management, a new firm headed up by former Australian Football League player James Hird.

Earlier this year, Sequoia chairman, John Larsen, said the firm expected to acquire bolt-on businesses in the licensee services space where it could gain a scale benefit and increase the number of advisers to whom it provided a licensee service.

“The need and rise in demand for advice has never been greater. We have therefore continued to increase the range of services available to our various customer segments so that we help drive that turnaround in adviser numbers, which has seen 10,000 advisers depart the industry nationally since 2018.

“In the short term, acquisitions and organic growth remain equally important whilst reaching ‘scale’ in the services we provide remains our core focus.”

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