IOOF will acquire 100 per cent of MLC comprising of its financial advice, platforms and asset management business for a total purchase consideration of $1.44 billion in a “tranformational acquisition”, the group confirmed via an ASX announcement on Monday.

IOOF CEO Renato Mota called the acquisition a “once in generation opportunity to create a leading wealth manager of the future”.

The proposed acquisition of MLC by IOOF makes sense, even if it is a deal that seems to have come out of left field.

In wealth where scale is everything – particularly platform scale – a strategic buyer has the most the benefit from a game-changer like this.

Private equity may have been firmly in the frame for MLC until now, but a strategic bidder will always outpace funds that lack post tie-up synergies. Maybe this one has the potential to turn into a public auction?

Before considering impediments that might stand in the way of this transaction (the deal is still pending deal approvals) it’s worth acknowledging that IOOF has proven its ability to get a deal over the line. Its last significant transaction to buy ANZ’s Pensions & Investments business was first approved in October 2017 but didn’t close until more than two-years later while a royal commission rumbled on in the background.

Mota has a background as a deal maker both within IOOF for the last 17 years and previously in corporate advisory at Rothschild. In an interview published at the start of this year with Professional Planer he emphasised the importance of scale and profitability of advice models.

In MLC Mota and IOOF would certainly get scale – combined MLC and IOOF would have in excess of $170 billion of platform funds under administration, surpassing BT, AMP and CFS, currently ranked one, two and three.

What else IOOF gets with a purchase of MLC is a fairly clean business – NAB has already funded all of the remediation you’d expect will be required, meaning the combined group can likely go forward without worrying too much about skeletons falling out of the closet.

In an interview last year MLC CEO Geoff Lloyd said one of the reasons he took the top job with MLC – a position he took knowing the business would be sold or spun off – was because NAB was committed to set the business up for success before cutting the umbilical cord.

The sale of MLC is as significant to the seller as it is to a potential buyer like IOOF, with a potential deal marking the end of an era, not just for National Australia Bank after 20 years of ownership, but also for banks in wealth management in this country.

Then of course there is the matter of advice brands – IOOF brings to the table Bridges, Shadforth, Lonsdale, RI Advice, millennium3, Consultum Financial Advisers and Financial Services Partners; MLC has TenFifty and Godfrey Pembroke while JB Were will likely stay with NAB.

The significance of a deal of this nature won’t be lost on Kenneth Hayne who stopped short of recommending vertical integration be banned. Whether conflicts can be managed by an institution with a distribution … ahem … advice network of this size will be a consideration for those writing the industry’s next chapter.