Count-Diverger merger completes to create $30bn firm
The merger between Count and Diverger, first announced in September, has completed to create Australia’s second-largest licensee behind AMP.
The newly combined firm has 590 accountants and more than 550 financial advisers, making it Australia's second-largest licensee.
It had previously been expected to be in third place, but Insignia’s sale of Godfrey Pembroke and Millennium3 in the last few months meant it dropped in the rankings.
Based on funds under advice, Count now has $29.9 billion and revenue exceeding $129 million.
Hugh Humphrey, Count CEO, said: “This acquisition resets the structure of wealth management advice in Australia, creating a leading diversified financial services company. The network now represents over 590
accountants, in excess of 550 financial advisers, and a greatly expanded suite of services.
“Through the Diverger acquisition, Count’s firms and their clients will access benefits through a range of exciting new services and investment options, including technical support, tax training, separately managed accounts (SMAs) and IT services.”
He said there are “material scale benefits” that come from being one of Australia’s largest integrated accounting, wealth and service providers. This includes the ability to secure better platform and insurance rates, better technology and research services.
“This new chapter for Count enables us to offer high-quality, holistic financial services to more clients in Australia.”
The merger was first announced last September, and Count initially faced a rival bid from COG Financial Services. However, COG later withdrew its bid as it felt it was unlikely to receive the support of the Diverger shareholders, including largest shareholder HUB24, who preferred the Count offer.
Count later upped its own offer in the face of pushback that the initial one undervalued Diverger and the deal was accepted in November.
In its financial results for the six months to 31 December last month, Diverger managing director Nathan Jacobsen said himself and chief financial officer Michael Harris would not be joining the combined firm.
Net revenue in Diverger’s wealth solutions business was $12 million, up from $9.1 million a year ago. The wealth part – which includes licensee entities, equity investment into practices and self-license services – accounted for 53 per cent of total revenue.
Meanwhile at Count, the firm’s financial results indicated the Diverger merger is not the last of its M&A activity.
"Undoubtedly, FY24 will be a transformative year for Count, especially with the scale and depth of the businesses that Diverger transaction brings. Even without the Diverger transaction, Count is expected to exceed the number of business-as-usual acquisitions compared to prior years in the form of equity, tuck-ins and services acquisitions,” Humphrey said.
“We’re very deliberate in how we target businesses for transactions that make sense strategically, that have the right cultural fit and comply with our disciplined approach around risk and capital management.”
AUTHOR
Laura Dew
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