Generation Development Group acquires Lonsec for $197.4m
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The news: Generation Development Group (GDG) will buy the remaining shares of investment research and consultancy Lonsec for $197.4 million.
The numbers: GDG has entered a binding agreement to acquire the remaining 61.9% of Lonsec, following its initial investment in the Sydney-based company in 2020.
The Pooled Development Fund group said it intends to raise around $155.4 million through an equity raising and a further $49.2 million through a conditional placement to finance the deal.
The context: GDG said that Lonsec has performed well since its initial investment four years ago, becoming a "strong contributor" to GDG's performance with a "strong future growth outlook supported by regulatory tailwinds".
The company noted that the acquisition increases scope to further capitalise on growth opportunity in managed accounts.
The takeover is expected to be "high single digit to low double digit" earnings per share accretive in FY25 on a full-year pro forma basis.
What they said: Grant Hackett, CEO of GDG's retirement investment business Generation Life, said: "Lonsec is well known and respected in the financial services sector, with its clients comprising a significant proportion of Australia's leading fund managers, superannuation funds, advisory groups and wealth platforms".
"The acquisition of Lonsec will provide GDG with full ownership of a highly strategic asset in an attractive segment of the wealth management sector," he said.
The source: ASX announcement
