IOOF has announced it will buy 100 per cent of MLC for $1.44 billion. The acquisition is expected to deliver in excess of 20 per cent earnings per share accretion, including $150 million of targeted pre-tax synergies.
“The opportunity to acquire a highly complementary business of the quality and size of MLC is compelling,” said IOOF CEO Renato Mota.
“MLC is a natural fit with IOOF and presents a unique opportunity to create value from synergies for the benefits of clients, members and shareholders. This is a once in a generation opportunity to create the leading wealth manager of the future.”
The new IOOF will be “Australia’s leading advice-led wealth manager”, with $510 billion in retail funds under management or administration – making it the “#1 retail wealth manager by FUMA” – with 1,884 advisers and $173 billion in superannuation funds under administration. It will manage the finances of 2.2 million Australians.
More to come.
More than happy for IOOF to be chasing more FUM….that just means their focus is on how much they can rip out in fees and not actually trying to provide value for their clients.
Called it a long time ago, now sit back and watch as they completely destroy business owners inside any of the ones left under their umbrella. They wont total control and will get it, and to have that it will be salaried advisers only. Maybe when the dust settles the ones that refused to listen will have to admit they actually were wrong>
Genuine “business owners” should never be operating under the control of another business in the first place. They should be self licensed.
The whole “Authorised Representative” concept is deeply flawed. IOOF’s move to more employed advisers is a sensible move. Those advisers who have sufficient independence and gumption will get their own licence.
How much did they pay Geoff Lloyd in all of this, should be available and scrutinised. What a woeful tale.
1+1 = less than 2. Remember the AMP acquisition of AXA? Totally destroyed share holder value. The execs are incentivised to do acquisitions for short term personal financial benefit. Share holder loses out big in the long term. Sad.
2 daggy old financial institutions with basements filled with archive boxes labelled ‘legacy products’. It’s a match made in heaven.
When IOOF is responsible for reshaping Aust’s Financial Services Industry, we are in a lot of trouble. The poor unsophisticated client at the end of the line will be paying all soerts of fees and kick-backs he was never aware of.
Indeed. Another product manufacturer wanting to dictate how, when, why, what and where advice is delivered. The industry will continue to drag its backside along the ground whilst this state of affair is allowed to persist. Financial planning becoming a profession? Unlikely.
IOOF responsible for reshaping the Australian Financial Services industry? That’s been done for the last decade of so by the industry funds. IOOF will become slightly more relevant thatn it is now (i.e. not much).
This will look great to analysts on paper, until the reality actually sets in. Perfect for execs to reap some solid bonuses in the short term and they can leave someone else with the mess as all companies do that grow by acquiring low quality businesses/assets.
With AMP out of the game soon enough, these guys will just as soon be next in the stand. Shouldn’t be allowed.
Another AMP in the making.
is exactly my thoughts too
Are we three related?
At least they have the balance to remediate clients, unlike what some smaller providers did in the case of the Branns and unreported cases – no recourse whatsoever, will never happen in large insto land
How long before they close the MLC products to new business and try to get advisers to push their clients over to Pursuit? Masterkey to become a legacy product by December 2021, take that to the bank.
Straight away, not even hiding it and in fact openly telling people
I wonder how they will deal with MLC’s IT systems and their workflow. That will be a test.
Trying to turn two poor businesses into one reasonable one so good luck
Agree- they can’t handle what they’ve got, so the plan is, use leverage buy more and then have the senior execs jump with their fat parachutes before the collapse.
What could possibly go wrong here?
Sends a clear message to the indrustry and positions them well to be the only horse in the race in the future, not to mention, id assume the balance sheets would start to look mighty fine retaining the comms and fees previously paid out to advisers. Quick clean up inside and theyll be away laughing.
If you can just imagine the look on Justice Hayne’s face as he reads this………
Old man chompers just did what he was told to do. Do nothing to vertical integration.
Good luck to IOOF. I hope they do good job and provide a viable institutional option for the Australian public. A few big corporate I think is vital for the success of our industry. They are aggressive in their acquisitions I take my hat off to the courage.
So you don’t operate under their banner then i take it.
Bold move.