Prime Financial Group has entered into a binding agreement to acquire investment research and fund management business Lincoln Indicators.
The advice and asset manager firm will acquire the Melbourne-based firm as well as the associated intellectual property held by a related entity.
Lincoln Indicators, which was founded in 1991, has 3,300 high-net-worth investors/clients that access a range of research services and proprietary managed funds, with $600 million in funds under management and 30 staff.
Co-founder and managing director, Tim Lincoln, will join Prime’s wealth leadership team following completion of the acquisition.
It currently runs three managed funds investing in US and Australian equities and a Stock Doctor investment service to help self-directed investors with quantitative research.
Prime, which flagged the acquisition last year, said the acquisition will help Prime gain access to the growing wealth management sector in Australia, with 690,000 individuals classed as high-net-worth investors, managing $3.4 trillion in investable assets.
The total consideration is $15.7 million for on-target EBITDA performance in four tranches, or $17.9 million if earning targets are outperformed.
A fixed consideration of $2.1 million will be paid for the intellectual property owned by the related entity plus a conditional consideration via an “outperformance payment” where earnings exceed specified targets during the three years, and a royalty equal to 50 per cent of any performance fees earned by Lincoln in its capacity as manager of any investment funds that Lincoln manages at completion.
In an ASX statement, it said: “The acquisition provides Prime with additional tools and services for the high-net-worth and wholesale investor market, including research and information for self-directed investors through to managed investment solutions complemented by Prime’s existing full investment, wealth management and SMSF services.
“Lincoln Indicators’ large client base adds significantly to Prime’s distribution capabilities with the ability to deliver its services, advice and products into this client base, many of which have been clients of Lincoln Indicators since inception over 20 years ago.
“As well as complementing Prime’s existing Wealth offering, Lincoln Indicators also provides Prime with numerous operational, client and capability synergies and cross-sell opportunities into the wider group.”
Prime managing director, Simon Madder, added: “We look forward to bringing our two businesses together with a respect for the legacy and client base that Lincoln Indicators’ co-founder and managing director, Tim Lincoln, and the team has built. Prime has a successful track record of working with founders and has a significant number as part of its leadership team.”
Announcing its full-year 2023–24 financial results last year, Prime reported annual revenue of $40.8 million – a 21 per cent increase from $33.7 million in the previous financial year. In Prime’s two key operating segments, the wealth division saw a revenue growth of 24 per cent to $18.8 million and its business revenue rose by 19 per cent to $21.8 million.
Prime’s recent M&A activity includes the acquisition of alternative asset management firm Altor Capital in February 2024 and Equity Plan Management (EPM), which offers remuneration and employee share plan administration services, in July 2024.
