Wilson HTM to buy Next Financial

Wilson HTM Investment Group will acquire private investment manager Next Financial, the group told the Australian Securities Exchange today.

Under the agreement, Wilson HTM will make an initial cash payment of $15 million into Next Financial as well as issue 6 million shares (at $1 per share) to Next Financial shareholders, resulting in a $21 million initial consideration.

The acquisition will also see Wilson HTM paying $11 million to WHK Group to buy out its 30 per cent interest in Next Financial. That deal will include a $7.4 million cash payment at settlement and $3.6 million in cash or shares in Wilson HTM to be given to WHK Group in the middle of 2010.

“The acquisition will provide another source of intellectual property to help generate alpha for our clients. It is also a neat extension to our business model, adding additional investment management, product structuring expertise and distribution to Wilson HTM,” said executive chairman Steven Wilson.

Next Financial’s income streams and products targeting the self-managed superannuation market would enhance Wilson HTM's business value in the future, and build the group's presence in Sydney, Wilson said.

The management and staff of Next Financial will be retained within the Wilson HTM business, the statement said. This includes Peter Kennedy, the founder and managing director of Next Financial.

The cultural fit between the two firms would underpin their integration, Kennedy said.

Kennedy also said the acquisition would provide opportunities to leverage the Next Financial business through Wilson’s integrated model.

The acquisition is expected to be completed on April 1, and is subject to certain conditions.

Next Financial’s book value was written down by 60 per cent in WHK Group’s December half-yearly results.