The Fiducian Group has acquired an unnamed financial planning business for $1.31 million, signalling its intention to "extract maximum benefit" from its "vertically integrated financial services model".
Fiducian has no debt and this acquisition is being fully funded by cash, representing an addition of $66 million to Fiducian Financial Services’ existing $1.275 billion in funds under advice.
“This is the first acquisition of a client base we foreshadowed could occur in our half-year report to shareholders,” Fiducian manager for investment projects Jai Singh said.
“We do not make acquisitions for the sake of market share, but rather to extract maximum benefit across the value chain in our vertically integrated financial services model,” Mr Singh said.
“The clients will be serviced by our salaried financial planners and our due diligence suggests that many could benefit from the Fiducian holistic financial planning and multi-manager services” he said.
“It is possible the acquisition could add up to $400,000 per annum NPAT within two to three years which is material.”
The capital payment is being staggered over two financial years.
After estimated cost synergies, the acquisition represents a 4 x EBIT multiple and the realisation of any revenue synergy may result in significant earnings accretion for shareholders within 12 months.
As a matter of policy, Fiducian does not disclose the names of advisers who join the group or sell their businesses and nor does it disclose the name of the dealer groups from which client bases are acquired.
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