Financial services firm, Spring Financial Group (FG) has entered into an agreement to acquire specialist superannuation and retirement planner, Financial Choice, a move that is expected to boost assets under advice by $325 million to around $850 million.
According to the company, the acquisition would also contribute $1.8 million per annum of recurring revenue and $1.2 million per annum of earnings before interest, taxes, depreciation and amortization (EBITDA).
Spring FG said it had agreed to pay $2.5 million “by way of cash and vendor shares” at settlement which would be expected to be completed in April, subject to final company and bank due diligence by Spring FG.
Additionally, the company said that a second deferred payment of $1.3 million would be paid in October while further performance-based payments of up to a maximum of $1 million, subject to future performance hurdles, might be payable to the vendor in late 2018.
Under the terms of the deal, Financial Choice founder and chief executive, Russell Medcraft would join Spring FG’s executive team, bringing with him a team of advisory and administration professionals.
Spring FG’s founder and managing director, Keith Cullen, said: “Financial Choice also has a diverse client base with a concentration of around 2,000 high value clients augmented with around 15,000 retail account holders from historical corporate super programmes”.
“We see a significant opportunity to broaden services to this group and unlock value for them and from them,” he said.
The company also said that the pro-forma impact on its financial year 2016 actuals would represent a 52 per cent increase in net profit after tax (NPAT) to $2.43 million, before considering revenue synergies.
Financial Choice provides financial advice and dealing services, including self-managed superannuation advice and administration, to retail and wholesale investors and self-managed super funds (SMSF) trustees from offices in Sydney and Melbourne.
