Bain Capital aims for Perpetual wealth management takeover by end of 2026
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More news: Investment giant Bain Capital said it aims to complete its $550 million acquisition of Perpetual’s wealth management business by the end of the 2026 calendar year.
Geoff Lloyd, the former Perpetual CEO from 2012 to 2018, will become the executive chair of the business under Bain’s ownership. Australia-based partners Mike Murphy and Charles Lawson have led the Bain investment.
What they said: “The business has significant growth potential through targeted investment, including in systems and technology upgrades. Bain Capital will support management to deliver that growth,” said Murphy.
Lawson commented: “Financial advice in Australia remains highly fragmented and we believe there will be opportunities to help drive consolidation through the Perpetual Wealth Management business.”
Perpetual to sell wealth management arm to Bain Capital for $550m
The news: Fund manager Perpetual has agreed to sell its wealth management business to Bain Capital for a fee of up to $550 million.
The numbers: Bain will make an upfront cash payment of $500 million, plus a potential additional cash amount based on the performance of the advice business prior to completion of the deal.
Perpetual may also receive an earn out payment of up to $50 million, based on the performance of the unit’s accounting and wealth operations, two years after completion.
The context: Perpetual will licence the brands “Perpetual Wealth” and “Perpetual Private” for a period of 15 years and continue to own all the rights to the “Perpetual” brand.
Net cash proceeds of the deal will be used to reduce debt and support investment in organic growth in Perpetual’s asset management and corporate trust businesses.
The agreement is subject to Bain obtaining approval from the Foreign Investment Review Board and the Australian Competition and Consumer Commission.
Perpetual is expected to incur transaction and separation costs of around $30 million post-tax.
What they said: “Following a thorough sale process, we believe we have achieved the right outcome for our shareholders, clients and people, and one that reflects wealth management’s longstanding reputation as a premium provider of high net worth advisory, fiduciary, philanthropic and not-for-profit offerings in the Australian market,” said Perpetual CEO and managing director Bernard Reilly.
“This is a pivotal step in our strategy to simplify and transform Perpetual. Following completion, Perpetual will have a stronger balance sheet and more simplified business, focused on two core businesses, asset management and corporate trustee services, while also enhancing its ability to invest for future growth and deliver improved shareholder returns over the longer term.”
The sources: ASX, Bain Capital statement
