Fiducian Group Limited (ASX: FID) has executed three separate agreements to acquire quality financial planning businesses in the Perth catchment area. Total consideration is $1.2 million which is being funded by cash.
These acquisitions continue Fiducian’s planned strategy to expand its quality financial planning network and lift Funds under Advice in Fiducian Financial Services by an additional $46 million to $1.8 billion.
Total Funds under Management, Administration & Advice (FUMAA) is currently reported as $4.5 billion.
Jai Singh, Manager Business Development & Distribution, says: ‘What differentiates the Fiducian offering is there’s greater certainty for the vendor and for Fiducian as the settlement is in cash and/or listed company shares, so the immediate and long-term benefits are transparent.’
Singh adds: ‘Fiducian wants to grow with like-minded financial planners who adopt its compliance processes. This is important to ensure client best-interest.’
The acquired businesses will work with Fiducian’s existing Perth salaried financial planning operations to optimise both targeted cost- and potential revenue-synergy benefits.
The targeted enterprise value multiple, after anticipated cost synergies for the acquired businesses, is between 5.0 to 5.5 times EBITDA. Any ongoing revenue synergy will be additional to cost benefits and should continue to deliver excess returns to shareholders as realised.
As a matter of policy Fiducian does not disclose the names of financial planners who join or sell their businesses and nor does it disclose the name of the dealer group from which the client base was acquired.
Singh says: ’Strategically, we envisage these acquisitions as an opportunity to lift both scale and the number of quality financial planners within Fiducian’s Perth salaried operations.’
