SYDNEY, AUSTRALIA: Count Limited (ASX: CUP), a diversified financial services provider, has announced that it has entered into a binding agreement to acquire 100% of the shares in Diverger Limited (ASX: DVR), a wealth and accounting firm, for $45.3 million.
The deal will be implemented through a board-recommended scheme of arrangement, subject to the approval of Diverger shareholders.
The acquisition will create a leading financial services provider with total revenues of $132 million, Funds Under Management and Advice (FUMA) of $29 billion, around 550 advisers, 563 accountants and a significantly expanded Services segment. Count expects to achieve cost synergies of $3 million and revenue growth opportunities from the combination of the two highly complementary businesses.
Count Chief Executive Officer Hugh Humphrey said “The transformational acquisition of Diverger continues the disciplined execution of Count’s strategic plan and accelerates the realisation of our growth ambitions. This transaction follows the successful acquisition of Affinia and signals an exciting new phase for the Company. Diverger 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.”
Under the terms of the deal, Diverger shareholders will receive 1.38 Count ordinary shares plus $0.367 in cash per Diverger ordinary share, or an alternative option of more shares or $1.10 per share in cash, subject to scale-back. The deal values Diverger at $1.14 per share, based on the last closing share price of Count as at 21 September 2023.
The Board of Directors of Diverger unanimously recommended the deal, in the absence of a superior proposal and subject to the independent expert concluding that the Scheme is in the best interests of Diverger shareholders. Diverger’s major shareholder, HUB24 which currently holds approximately 31.5% of Diverger’s ordinary shares, has issued a statement of support for the deal, and intends to vote in favour of the Scheme.
Diverger is a wealth and accounting firm with around 200 advisers and $12 billion in FUMA. It generated net revenues of $37.6 million and Net Profit After Tax and Amortisation (NPATA) of $4.7 million for the financial year ending 30 June 2023.
The transaction is expected to be earnings per share (EPS) accretive after completion and 25%+ EPS accretive after realisation of the expected full run-rate cost synergies (excluding revenue synergies and one-off transaction and integration costs).
The deal is subject to customary conditions, including regulatory approvals, court approval and approval by Diverger shareholders at a meeting expected to be held in December 2023. The deal is expected to be completed by January 2024.
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