Together with a special purpose subsidiary of a discretionary trust established for the benefit of Count Member Firms, CountPlus will enter a binding sale and purchase agreement to purchase Count Financial from the Commonwealth Bank for $2.5 million, pending shareholder approval, according to a statement on the ASX.
CountPlus will hold 85 per cent of Count Financial while Count Member Firms will hold the remaining 15 per cent.
It said a notice of meeting and independent expert report will be issued shortly. Further, a shareholder extraordinary general meeting will be held in early August and the proposed completion of the acquisition to be 1 October.
CBA also confirmed it’s intending to sell down its 35.85 per cent equity interest in CountPlus. It is also offering $200 million of indemnity to cover remediation of past product as part of the deal.
CountPlus managing director and chief executive Matthew Rowe said the strategic acquisition creates a strong professional accounting and financial advisory network aligned by its shared values, mutual success and sense of community.
“The board and executive team at CountPlus are focused on clear strategy for growth, and building a scalable and sustainable, customer-centric professional service network,” Mr Rowe said.
“The company is pleased with today’s announcement and the directors encourage shareholders to endorse this acquisition at the upcoming extraordinary general meeting.
“This acquisition will take us one step closer toward our vision to become Australia’s leading network of professional accounting and advice firms, aligned through shared values, mutual success and our sense of community.”
Count Financial has 359 advisers and 160 firms with $8.1 billion of funds under administration.
And for a minute there ASIC thought they were going to squeeze some dollars out of the big banks. How wrong they were. Guess us little guys with be left with the bill.
When will the responsible managers and management be held accountable for the incompetence of the organisation? They go into any other job and their life goes on earning the big $. It is an absolute nonsense.
A $370.5M capital loss creates one hell of a tax benefit!?! Better deal for CBA shareholders than demerging to a new entity and getting nothing out of the deal.
Paying $2.5M for a business losing $13M this year is hardly the deal of the century. There was no other likely buyer as Countplus had a 10 year deal with Count that locked in their leading practices to the Count AFSL. If Count was sold elsewhere those Countplus forms would most likely have found a new AFSL (TFS) when the deal expires in 2020.
[quote=Jock McIntyre]BEST INTERESTS DUTY applies to Financial Advisers but presumably NOT TO INSTITUTIONS guarding the wealth of shareholders if a business with FUM of $8.1 Bil is sold for only $2.5 mil.
recorded a 13m + loss though..
BEST INTERESTS DUTY applies to Financial Advisers but presumably NOT TO INSTITUTIONS guarding the wealth of shareholders if a business with FUM of $8.1 Bil is sold for only $2.5 mil.
It’s a token $2.5 million to show the board that at least you got something for your dead horse.
The favourite tactic of barry’s to make advisers who had the temerity to leave Count to have EVERY client sign a transfer form for EVERY investment, super and/or insurance product they had. This allowed him to mop up all these ‘orphan’ clients and just sit on the revenue.
It’s basically a give away with the added benefit of remediation (both announced and future planned) covered 200mil. This is a win win, they want it off their books like all big banks and count plus pick up some very decent income via splits and etc. Problem is how will they absorb the costs, count (like nearly all dealer groups fyi) running at 13-20mil loss pa.
1. for $8.1B in FUM to be worth something, you have to assume you are being paid something on it. For anyone not living under a rock, the millions in grandfathered revenue attached to FUM like this is all but gone. Meaning the FUM is only as valuable as the ongoing advice fees the actual adviser can levy on it or your ability to churn it into product where you do make a margin (AKA, the miracle of managed accounts)….. again, unless you have been living under a rock, that ongoing advice revenue is highly volatile, subject to huge regulatory pressure and unlikely to cover the costs of running a large licensee in any case.
2. Given the above, $2.5m ins’t the “deal of the century” and as far as “any other licensee would have paid more for Count”. you’re dreaming!
3. yeah, CBA did pay $370m for Count + god knows what remediation and compliance costs over time + up to $200m in further indemnities. CBA has lost will over $600m on that transaction!
No one else would want to buy it. Full of accountants who think they know best with minimal compliance…. Surprised the remediation figure is so low…
Didn’t CBA buy Count for over $300M? CBA must be bleeding cash from the worst deal ever made. Some scrutiny over this sale should happen as any other licensee would have paid more for Count.
What a give away! The poor shareholders of CBA must be fuming!
CBA paid $373M for Count Financial in 2011. Grahame Petersen of CBA who announced the deal with Barry Lambert has since retired. So that’s a loss of $370.5M on this transaction.
I think CBA bought Count for around $400 million.
[quote=Carrytheone]$2.5m for a firm with $8.1b of FUA? – is it in receivership? Got to be the deal of the century.[/quote][quote=Carrytheone]$2.5m for a firm with $8.1b of FUA? – is it in receivership? Got to be the deal of the century.[/quote]
Other reporting saying CBA will also cover remediation expenses up to $200m. What a deal for CountPlus.
$2.5m for a firm with $8.1b of FUA? – is it in receivership? Got to be the deal of the century.