A formal process to sell advice licensee Madison Financial Group will begin “as soon as possible”, Connie Mckeage, CEO of its current owner, OneVue, has told Professional Planner.
Since landing in OneVue’s lap on Friday following the administration of former owner, Sargon, Mckeage confirmed OneVue had no intention of continuing to own the advice network.
Receivers appointed to manage OneVue’s secured interests over the Sargon assets will be in charge of appointing an investment firm to run the process to sell Madison, Mckeage said. Madison was rebranded as Sargon Adviser Services last year before Sargon went into administration at the end of January.
Mckeage said she has received dozens of inbound inquiries from would-be acquirers of Madison (formerly Sargon) since Friday.
SC Australia Holdings is the appointed receiver of OneVue’s secured interest in the Sargon assets while OneVue has appointed PwC to manage the process on its behalf. Ernst & Young is Sargon’s voluntary appointed administrator. In addition to Madison, OneVue also has security over Sargon’s almost 20 per cent stake (worth $4.6 million) in ASX-listed integrated financial services company, Sequoia Financial Group.
OneVue was owed $31 million in deferred payments for its Trustee Services Business which Sargon agreed to buy last year. Sargon was due to complete this deferred payment by May 29 this year, but on January 29 administrators were appointed to the business.
Mckeage could not confirm how much of the $31 million that transfer of ownership of Madison represented.
“The receivers are chipping away at this amount,” she said.
Mckeage said she has been “surprised” by the amount inbound interest from potential acquirers of Madison since informing the ASX on Friday that Madison would end up in OneVue’s control. Madison had 103 authorised representatives in its network mid-last year.
“I am surprised, I didn’t think there would be so many interested in investing in advice, a lot of people are looking to invest in advice because they’re looking for scale… we have received dozens of expressions of interest [to buy] Madison,” she said.
OneVue has no interest in owning an advice business, McKeage said.
“We are very clear, we made a decision we didn’t want to be vertically integrated, all we did [with Madison] was step in to take control over the security and help facilitate the transition to new owners,” she said. “We are not in the business of advice and don’t intend to be.”
McKeage would not comment on likely value or valuation metrics associated with Madison.
“We are not experts in advice and I don’t intend to go down that path,” she said.
McKeage added that OveVue planned to stick to growing its core fund administration and platform services business.
“I think in this environment you really have to stick to what you’re good at, and we are very clear what we want to excel at. We want to be a large scale admin’ business, a platform and funds services business. We have got out of 3rd party [regulatory business, RE and trustee] business and we don’t intend to own advice,” she said.