Sequoia Financial Group has entered into a purchase of assets agreement with Total Cover Australia (TCA), via the company’s wholly owned subsidiary InterPrac Securities.
The acquisition would be the fourth purchase of a retiring InterPrac adviser’s portfolio over the last three years.
The company also said in the announcement made to the Australian Securities Exchange (ASX) that it would continue to look for similar opportunities in New South Wales and Queensland, at a time where many ex-advisers of banks were looking for new employment opportunities rather than considering a self-employed option.
Sequoia, which sees the deal as beneficial to all parties, said the company would be able to absorb these portfolios without significant additional expense, making a strong contribution to its earnings before interest, taxes, depreciation and amortisation (EBITDA).
TCA, which was the corporate authorised representative of the Sequoia group through InterPrac Financial Planning and averaged $800,000 of annual income for the past three years, would be absorned into the 100% owned ‘direct’ client base of InterPrac Securities, commencing July 2020.
TCA also elected to take part cash and part equity in the company to maintain a continued relationship with InterPrac Securities and the wider Sequoia group. Following this, Sequoia would issue 1.5 million shares immediately and make cash payments of $900,000 over the next two years to complete the purchase.