The Snowball Group has entered into a deal to acquire financial planning and accountancy group Investment Taxation Specialists (ITS), a move which will significantly expand distribution of Snowball products.
“The strategic advantage of the proposed acquisition is that it would further broaden Snowball’s distribution and client servicing capabilities, particularly in the key region of New South Wales, contributing towards our ultimate goal of providing national integrated financial services,” Snowball managing director Tony McDonald says.
According to ITS managing director Ross Anderson, ITS’ initial aim was to form an alliance with a master trust platform provider. A mutual interest was then formed between ITS and Snowball, Anderson says, and discussions led to the acquisition agreement.
“We have been looking for a product platform like Snowball’s for some time, and it made sense to put the two businesses together,” Anderson says.
“Our objective is to begin to gain equity in any master trust or wrap account we use, and by doing this deal with Snowball, we are achieving that.”
Formed in December 2000, ITS has about $250 million under administration and 100 staff, including 12 financial planners and 52 accountants.
Training has already begun on the distribution of Snowball products through ITS, and ITS financial planners plan to be using Snowball products by next month.
The proposed acquisition is subject to due diligence and approval by both group’s shareholders, and the process is expected to be completed by mid June.
Once approved, ITS will retain its brand and come under the Snowball Group umbrella, which already includes the wholly owned and integrated financial planning and accounting businesses CIS and CWM.
As part of the deal, Snowball will issue securities to ITS shareholders to the value of about 25 per cent of Snowball’s current issued share capital. The final number of shares and options issued to ITS will be dependent on ITS meeting performance hurdles for the 2002/2003 year.
McDonald says growth via further acquisitions is a possibility for Snowball, but the group remains very selective.
“We’ve always got our eyes open, but we have a clear strategic view. We look for national operating capability and really good people.”
