Praemium has announced the sale of its international business operations to Morningstar in a move expected to accelerate its growth trajectory in the Australian platform market.
The firm said in the announcement that the transaction value of the sale of its operations in the United Kingdom, Jersey, Hong Kong and Dubai stood at $65.1 million, subject to completion adjustments, and the unlocked capital would allow to focus the financial resources on its core business, and was expected to complete during Q2/Q3 of calendar year 2022.
The firm’s chief executive, Anthony Wamsteker, said that Paremium’s international business was operating at a scale disadvantage to its key competitors.
“Morningstar will bring its global footprint and investment scale to better serve the interests of international clients and better advance the career opportunities of our international employees,” he said.
“Praemium is well positioned in the Australian wealth management industry with platform, non-custodial and SAAS offerings. Following last quarter’s record funds under administration momentum, we continue to see a solid pipeline of inflows and opportunities to support future growth across all our business segments.”
Following completion, the Praemium Board said it planned on returning surplus net proceeds to its shareholders and, given the projected capital and franking credit position post the sale and underlying profitability of the Australian business, it was expected that a dividend policy would be introduced for FY2023 onwards.
Completion of the transaction would be subject to regulatory approval from the Financial Conduct Authority in the UK and the Jersey Financial Services Commission in Jersey, and other customary conditions. At this stage the parties expect to complete the transaction during Q2/Q3 of calendar year 2022.
