Financial Index Wealth Accountants (“FIWA“ or “Findex”) has entered into a Bid Implementation Agreement (“BIA”) with high net worth advisory firm Centric Wealth Ltd (“Centric Wealth”), under which Findex has agreed to acquire all outstanding ordinary shares issued by Centric Wealth by way of an off-market takeover bid (“Offer”)*.
Under the terms of the Offer, Centric Wealth shareholders will be entitled to receive 8.9 cents cash per ordinary share.
The Centric Wealth board of directors (“Board”) believes the Offer is fair and reasonable, and has unanimously recommended that shareholders accept the Offer, subject to there being no superior proposal. Centric Wealth’s directors have also agreed that they will accept the Offer with respect to any shares owned or controlled by them, subject to there being no superior proposal.
FIWA founder and chief executive officer Spiro Paule said the transaction would bring together two businesses with a strong focus on providing the highest quality financial advice for clients.
“The combination of the two businesses creates one of Australia’s largest, non-aligned financial advisory organisations,” he said. “We are both focussed on providing the best possible advice and solutions to our clients. We will be able to share respective areas of expertise and offer clients and employees a greater level of sophistication and opportunity.”
Centric Wealth chief executive officer Phil Kearns said the businesses have similar core values and cultures, geared toward providing the highest quality, non-aligned advice for clients.
“We have a strong alignment of values and culture within our respective organisations, and by leveraging each other’s processes we will continue to deliver on our client promise for many years to come. It’s also a win for our staff and shareholders and it will ensure we can develop and improve the service we currently deliver clients.”
FIWA will partner in the proposed transaction with KKR Asset Management, a credit business with $20.4 billion in assets under management that is an affiliate of KKR & Co. KKR provided acquisition funding and KKR will have an equity interest of approximately one-third in the merged group.
“We believe the combined strength of Centric Wealth and FIWA underpinned by the global reach and capability of KKR will create a new force in Australian wealth management,” added Paule.
“We are pleased to support the growth of the combined business and look forward to being a long-term constructive partner to Findex. This transaction further reflects the breadth and diversity of KKR, working constructively on complex transactions around the world,” said Jamie Weinstein, Member of KKR and Global Co-Head of Special Situations.
FIWA was advised by Jeff Singh of Chase Corporate Advisory.
Next steps
Centric Wealth shareholders are not required to take any action at this stage. Detailed information in relation to the Offer will be set out in the FIWA bidder’s statement, which will be sent to shareholders as soon as practicable. Centric Wealth will also dispatch to its shareholders a target’s statement, containing further information about the Offer and the Board’s recommendation. It is expected that the bidder’s statement and target’s statement in relation to the Offer will be dispatched together. The Offer will be open for a minimum of one month from the date of dispatch.
Indicative timetable
| Lodgment Date with ASIC | 27 January 2014 |
| Bidder and Target dispatches Bidder’s Statement to Shareholders | 17 February 2014 |
| Offer Date | 17 February 2014 |
| Offer Period ends | 17 March 2014 |
Offer details are contained in the Bid Implementation Agreement, including the conditions of the Offer, the rights of termination, exclusivity and the payment of break fees in certain circumstances.
* This includes any ordinary shares issued during the offer period as a result of the conversion of any existing securities convertible into Centric Wealth ordinary shares.
