Sequoia Financial Group announces divestment of 80% of Morrison Securities

SYDNEY, AUSTRALIA: Sequoia Financial Group Limited (ASX: SEQ) has entered into a binding agreement to divest 80% of its equity interest in Morrison Securities Pty Ltd to New Quantum Holdings Pty Ltd (NQ), a company that provides digital wealth management platform services.

Under the agreement, SEQ is set to receive a total cash consideration of $40.5m for the transaction, for an 80% equity interest in Morrison which on completion date will have a debt free balance sheet with net working capital of $10.5m. Completion of the transaction is subject to customary conditions including the parties executing formal share sale and shareholder agreements incorporating terms contained in the binding term sheet.

SEQ will earmark $0.5m of the purchase price to establish a trust for all employees of Morrison Securities which will hold shares in SEQ and vest to employees over the next 18-month period. The SEQ board believed the opportunity for Morrison to expand its service offering was restricted by the SEQ balance sheet.

This transaction will allow SEQ to retain a minority but viable interest in Morrison and provide the business with the capacity to capitalise on opportunities that both SEQ and NQ have recognized as important for the future growth of Morrison.

SEQ received several expressions of interest for acquiring part or all of Morrison over recent times but selected NQ as our business partner because of its flexible approach to this transaction and its desire for SEQ to maintain an active role in the development and growth of the business.

This growth will be guided by our experienced and professional executive team at Morrison who will continue to manage the business alongside NQ who are committed to investing in technological solutions that will improve the service offering to the very loyal customer base of Morrison.

The divestment, which will be completed in August 2023 will have no impact on FY 2023 results however it will see SEQ’s current consolidated Group revenue reduce by approximately 20% in FY 2024.