Rubik Financial Limited (Rubik, ASX:RFL), the ASX-listed provider of financial technology and software, continues to build Australia’s most comprehensive and inclusive revenue and commission software solution for financial planners, by announcing today:
– completion of its transaction with Revex Solutions Pty Ltd, as announced 19 July 2013, allowing for exclusive distribution of Revex software to Rubik clients, with the option to purchase Revex after three years, and
– it has entered a non-binding term sheet with Easy Dealer group, a division of AMEE Easy Software Solutions, to acquire its revenue and commission software business. The terms allow for Rubik to acquire 100% of AMEE Easy Software Solutions from its vendors once the acquisition of Easy Dealer is complete.
Rubik is also pleased to announce that the planned integrated COIN/Revex hosted solution, a critical component of the Revex Transaction, will be available to independent financial planners from February 2014.
Wayne Wilson, Rubik Managing Director Wealth, said the automated solutions derived from the Revex and Easy Dealer transactions will provide planners robust, efficient and FoFA compliant commission and revenue information management and reporting.
“The reality for most financial planning businesses is that their revenue is derived from multiple and disparate sources, representing various client structures,” Mr Wilson said.
“Often the task of unbundling revenue to comply with FoFA definitions can be onerous”.
Mr Wilson says the Revex Transaction and the Easy Dealer Transaction are highly complementary because:
– the COIN-integrated Revex solution will primarily be targeted at the COIN installed base, which exceeds some 15,000 seats; while
– the Easy Dealer solution will continue to service clients that connect through non-COIN financial planning solutions such as XPLAN or MidWinter, presenting Rubik valuable opportunities to extend its COIN offering as well as market its scaled advice, online, platform Provisio.
“With both the Revex and Easy Dealer automated solutions, Rubik can provide fully merged FoFA documents at the touch of a button, no matter whether the planner is using COIN or XPLAN, which means we can now support clients no matter the planning software platform that they use,” Mr Wilson said.
ADDITIONAL NOTES ON TRANSACTIONS
Revex Transaction
The Revex Transaction consists of two key elements. Firstly, Rubik’s right to sell the Revex solution and secondly the ability for Rubik to acquire the Revex business including all of the intellectual property.
Reseller agreement
Rubik holds the distribution rights over the Revex software on an exclusive basis for Rubik Wealth’s customers, covering institutions, independent financial advisors (IFAs) and industry superannuation funds, as well as non-exclusive rights for other customers with Revex continuing to support and market to its direct relationships.
Option agreement
Rubik has the option to purchase the Revex business outright, at the end of a three-year period. The consideration will be based on a multiple of revenue achieved in the final 12 months prior to the exercise of the option. The multiple paid will be dependent upon the source of the revenue.
Easy Dealer Transaction
The term sheet entered into with Easy Dealer is non-binding. The parties have agreed to negotiate on an exclusive basis to agree full form, binding, transaction documentation.
Structure
The Easy Dealer Transaction, once complete, will see Rubik purchase 100% of the share capital of AMEE IP Holdings Pty Ltd (and all of the units in the AMEE IP Unit Trust – the owner of Easy Dealer Software and all associated intellectual property rights) and AMEE Easy Software Solutions Pty Ltd (trading company), from its owners
The transaction has been structured with a single upfront payment based on a multiple of normalised run rate FY14 EBITDA. The proposed EBITDA multiple is 4.55x, meaning that at completion of the Easy Dealer Transaction, Rubik expects to pay the Vendors $2.7million.
About Easy Dealer
Easy Dealer was established by Matthew Meath in 2000, with the launch of the “Easy Brokerage” product. This product provides automatic brokerage allocation and automatic income distribution, and provides instant client segmentation reporting.
Subsequently developed and launched was “Easy Dealer” for licensees and aggregators, and then “Easy Payments” to allow the financial planning industry to take credit card payments and direct debits, and “EBAFSL” which is an extension of “Easy Brokerage” but with the ability to import revenue statements from product providers.
Today Easy Dealer’s customer base includes hundreds of financial planners and dealer groups located in all states (excluding NT) around Australia. Easy Dealer offerings mainly compete with XPLAN’s “Commpay” offering.
About Rubik
Rubik design, build, host and support software and data for Financial Services industry participants. The firm provides financial planning software to wealth advisers and core banking systems including other related banking software. Rubik delivers trusted, reliable systems through a focus on quality, reliability and security. Rubik is ISO 9001, ISO27001 and NoCO2 certified.
