Sydney, Australia: HUB24 Limited and Class Limited entered into a Scheme Implementation Deed (SID) for the acquisition by HUB24 of 100% of the ordinary shares in Class Limited.
Class shareholders will receive 1 ordinary HUB24 share for every 11 ordinary Class shares held, plus $0.10 per ordinary Class share. The implied total consideration of $386 million represents a 52.8% premium based on the 1-month VWAP for both companies up to 15th October 2021.
The proposed transaction is expected to accelerate HUB24’s platform of the future strategy, consolidating the Group’s position as a leading provider of integrated platforms, technology and data solutions for financial advisers, accountants, private banks, licensees, stockbrokers and their clients.
The combined business will provide a compelling and unique competitive advantage and diversification of revenue.
HUB24 and Class Limited are highly complementary businesses with a track record of innovation and aligned culture and values, focussed on the delivery of solutions that support professional advisers and accountants to implement investment, tax and strategic advice.
By leveraging the combined capabilities there is an opportunity to deliver increased value, efficiency and product solutions for both existing and new customers. It is intended that Class will operate as a business unit within the HUB24 group under the Class brands and leadership team.
The acquisition of Class is expected to be 8% Earnings Per Share (EPS) accretive (excluding revenue synergies and one-off implementation costs) to HUB24 shareholders by FY23 and deliver cost synergies of approximately $2 million p.a.
The Class Board of Directors has unanimously recommended that Class shareholders vote in favour of the Scheme, subject to an independent expert concluding that the Scheme is in the best interests of Class shareholders and in the absence of any superior proposal.
HUB24 Managing Director Andrew Alcock commented: “We’re excited to be announcing the proposed acquisition of Class Limited with the full support of the boards of both companies. Class are market leaders in the establishment, management and administration of wealth and SMSF solutions.
The completion of this transaction will combine two exceptionally talented teams with a common purpose to empower better financial futures for Australians and provide a unique range of products and services for financial professionals and their clients.”
Andrew Russell, CEO and Managing Director of Class said: “The combined strengths of Class and HUB24 will further accelerate the transformation of Class and provide exciting opportunities for future growth. We’re pleased Class will continue to run as a separate business unit within the HUB24 group so our team can continue to deliver on our strategy, whilst leveraging our deep technology expertise to deliver superior outcomes to both sets of customers.”
The Scheme is subject to Class shareholder approval, approval of the Supreme Court of New South Wales and no material adverse change occurring in relation to HUB24 and Class, as well as a number of other customary conditions usual for a transaction of this nature.
The full terms of the SID (with certain redactions) including details on customary deal protection and exclusivity terms, have been separately released by Class to the ASX. Subject to the relevant conditions being satisfied, the Scheme is expected to be implemented mid to late February 2022.
HUB24 Limited is a company listed on the Australian Securities Exchange. The company consists of the award-winning HUB24 platform, HUBconnect business and Xplore platform.