Count Limited has announced the strategic acquisition of Diverger Limited, under which Count will acquire 100 per cent of the issued shares in Diverger by way of a scheme of arrangement that values Diverger at $45.3 million.
At completion, which is expected in early 2024, Count will represent a diversified financial services provider bolstered by total revenues of $132 million, funds under management and advice (FUMA) of $29 billion, around 550 advisers, 563 accountants, and a significantly expanded services function.
In an ASX statement issued on Friday, Count chief executive Hugh Humphrey said the transaction signifies an important step towards achieving the company’s ambition to be Australia’s leading provider of integrated accounting and wealth services.
“This is an exciting transaction that continues the disciplined execution of our growth strategy, bringing tangible benefits to Count and Diverger shareholders, our member firms and their clients. Count and Diverger both have a deep heritage in accounting and financial advice, with complementary strengths that will position us as an industry leader,” Mr Humphrey noted.
Count additionally clarified that the transaction is expected to deliver a material increase in scale and diversification of its revenue and earnings as well as unlock further growth opportunities.
Namely, Count member firms and clients will also have access to a range of new services and investment options currently offered by Diverger, including technical support, tax training, and IT services.
Mr Humphrey added that the agreement underscored the company’s commitment to bringing high-quality, holistic financial advice to more Australians.
“We believe every Australian should be able to access professional accounting and advice services from a trusted source, which in turn gives them the confidence to look ahead.”
“Diver has a strong cultural fit with our company and the combination is expected to unlock material benefits for all stakeholders as well as positioning us to lead further consolidation.”
According to Count, the Diverger board was unanimously supportive of Diverger shareholders voting in favour of the scheme, in the absence of a superior proposal and subject to the independent expert concluding that the scheme is in the best interests of shareholders.
HUB24, which currently holds approximately 31.5 per cent of Diverger’s ordinary shares, has also issued a statement of support for the transaction, and, in the absence of a superior proposal, has announced its intention to vote all of the Diverger shares it holds or controls in favour of the scheme.
The transaction follows Count’s successful acquisition of Affinia from Australian life insurer TAL in May, signalling an “exciting new phase” for the company, Mr Humphrey further affirmed.
Consolidation in the industry continues and we can’t blame the player here. We need to blame the game. Government interventions is making it difficult to make a reasonable profit in this game. Consolidation and scale is the only way. I have always believed Licensees need to be Large or small to survive. Mid Tier Licensees will continue to merge. Once this industry becomes a total basket case, Governments may then change course and realise that all their interventions have come to nothing and have wreaked carnage on an industry that did not deserve it. I wish Diverger and Count the best of luck.
Well done to all concern and I trust this merger is successful. Knowledge base and more importantly the people, is exceptional and I hope that doesn’t change.
However, given I have been in the financial planning industry for over 35 years, moments like this usually have adverse outcomes.
Look at all the platforms that were independent then got taken over and institutionalized, then stuffed up by the banks, AMP buying all the SMSF providers so no one else could have them, Insurance companies, and the list goes on.
And don’t forget that Count had a time across to the dark side when CBA took them over.
Just saying.