SYDNEY: Australian financial services firm Perpetual Limited (PPT.AX) has entered into a binding agreement to sell its wealth management business to Bain Capital Private Equity for up to A$550 million ($364 million), the company said on Monday, as it moves to simplify its operations and strengthen its balance sheet.
The deal includes an upfront cash payment of A$500 million at completion, subject to adjustments for regulatory capital and working capital, with the potential for an additional upfront payment based on the performance of the advice business prior to completion. A further earn-out payment of up to A$50 million could be made depending on the performance of the Accounting and Wealth operations in the two years following completion.
As part of the transaction, Perpetual will license the brands “Perpetual Wealth” and “Perpetual Private” to the acquired business for 15 years, while retaining full ownership of the “Perpetual” brand.
The sale will be implemented through the divestment of all shares in Perpetual PWM Services Pty Ltd, the head company of the Perpetual Wealth Management Group, on a cash and debt-free basis.
Net cash proceeds will be used to reduce debt and fund organic growth in Perpetual’s remaining core businesses: asset management and corporate trustee services. Following completion, the company expects its pro-forma net debt to EBITDA ratio to stand at approximately 0.2x, after accounting for transaction costs, taxes and other adjustments.
“This is a pivotal step in our strategy to simplify and transform Perpetual,” said CEO and Managing Director Bernard Reilly. “Following completion, Perpetual will have a stronger balance sheet and a more simplified business, focused on two core areas.”
The transaction is expected to complete toward the end of the 2026 calendar year, subject to regulatory approvals from the Foreign Investment Review Board (FIRB) and the Australian Competition and Consumer Commission (ACCC), as well as court approval for a corporate restructure required to separate the wealth management business from the broader group.
The deal is not subject to financing conditions. Perpetual estimates additional post-tax transaction and separation costs of around A$30 million, to be incurred over 12 to 18 months.
Estimated taxes on the proceeds are expected to be between A$45 million and A$50 million, which will add franking credits to Perpetual’s balance sheet for future dividend payments, likely by the second half of 2027.
Barrenjoey acted as financial adviser to Perpetual, with King & Wood Mallesons providing legal counsel.