AXA buys ipac Securities for $205 million
AAXis set to buy 100 per cent ofipac Securitiesfor $205 million and will run it as a stand alone unit.
AXA Asia Pacific group chief executive Les Owen says the purchase is in line with the company’s stated strategy of growing within the area of wealth management through acquisitions of financial advisory businesses.
Owen says under the deal, ipac would continue to work under its same brand and business model and management team. He says with more than 1100 advisers in AXA’s existing Australian networks, the company saw significant benefits flowing from using elements of ipac’s model and expertise.
Owen says as part of the deal, a retention and deferred performance incentive program for ipac’s executive directors and key staff will be drawn up.
He says under the program approximately 22.6 million shares in AXA Asia Pacific may be issued to key ipac executives, subject to meeting strong future growth in funds flows for ipac and AXA over a five year period.
Owen says in order to neutralise the impact of any issue of shares under the incentive program, AXA intends to buy back on the market 22.6 million AXA Asia Pacific shares with the overall completion of the acquisition set for the end of August, subject to regulatory approvals.
The transaction will not affect the AXA - Alliance Capital joint venture and agreements or ipac's multi-manager approach.
ipac, an Australian funds management advisory business, has total retail funds under administration of approximately $3.3 billion, with ipac having 33 advisers operating in four locations around Australia. The group has total annual net flows estimated around $731 million, as well as having a strategic relationships with 81 independent advisers.
Owen says the purchase will build on its earlier acquisition of Sterling Grace in October last year. He also says that based onAssirtfigures for the March qaurter, the newly combined group will have total retail assets under management of more than $17 billion excluding cash, making it the fifth largest player in the retail market.
The news of AXA’s purchase of ipac comes less than a month after global chief executive officer Henri de Castries stated AXA is looking for organic growth in its operations and will only use acquisitions if there is perceived value.
“We don’t need to make acquisitions to grow earnings, I am optimistic we can enhance our long-term organic growth,” de Castries toldMoney Managementearlier this month.
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