Generation Development Group to acquire Evidentia for $320 million

MELBOURNE: Generation Development Group (ASX: GDG) announced Monday it has entered into a binding agreement to acquire 100% of Evidentia Group Holdings Pty Ltd for $320 million.

Evidentia now manages $13.7bn in assets for Australia’s leading Private Wealth Firms.

The acquisition will be partly funded by a fully underwritten equity raising of approximately $287.9 million.

Evidentia, one of Australia’s leading providers of investment management and tailored managed account solutions, will merge with GDG’s Lonsec Investment Solutions.

The combined entity will become the undisputed leader in the managed accounts market, with over $25 billion in funds under management.

The acquisition is expected to be low double-digit earnings per share (EPS) accretive in the first full year of ownership, excluding synergies. Evidentia’s current CEO, Peter Smith, will become the Executive Chairman of the expanded managed accounts business and join GDG’s board of directors.

“This transaction represents another significant milestone in GDG’s growth strategy,” said GDG Chief Executive Officer Grant Hackett. “Evidentia’s boutique tailored managed account solutions, paired with Lonsec’s enduring heritage of knowledge, will deliver a more complete and scalable offering.”

The acquisition will be funded through a $287.9 million equity raising, comprising a $114.4 million institutional placement and a $173.5 million entitlement offer. GDG directors and senior management have committed to participate for $1.6 million of their entitlements under the entitlement offer.

Evidentia, which launched in January 2020, has grown to approximately $12.7 billion in funds under management. The merger is expected to create a leading end-to-end investment management and managed account solutions provider for licensees, financial advisers, and their clients.

Completion of the acquisition is expected in February 2025, subject to customary closing conditions. The equity raising is expected to be conducted according to a proposed timetable, with the retail entitlement offer opening on Feb. 14, 2025, and closing on Feb. 27, 2025.

GDG anticipates that its FY25 earnings forecast remains in line with consensus, based on current earnings momentum and market conditions.