Count-Diverger merger to create 3rd largest licensee
The planned acquisition of Diverger by Count will create the third-largest licensee in Australia.
On 22 September, Count announced it has entered into a scheme of arrangement with Diverger in a $45.3 million deal that is expected to be completed in February 2024.
Diverger’s major shareholder, HUB24, has backed the transaction and intends to vote in favour of the scheme in the absence of a superior proposal.
Count said it has identified approximately $3 million in cost synergies and a number of new revenue growth opportunities to be delivered through a rigorous integration and benefit realisation program.
A Count presentation on the ASX outlining the deal’s benefits stated Count has 379 financial advisers while Diverger has around 200, creating a firm with 579 advisers.
According to Wealth Data, the deal would create the third-largest financial advice licensee behind Insignia at 956 and AMP at 881.
Diverger includes Merit Wealth, GPS Wealth and Paragem, with each having 160, 144 and 91 advisers respectively. However, it noted many of those at Merit Wealth are restricted advisers who primarily focus on SMSF administration, so the sum of holistic financial advisers is around 200.
As well as the Diverger deal, Count gained 100 advisers earlier this year from financial advice licensee Affinia, which it acquired from TAL.
Wealth Data founder, Colin Williams, said its dominance could increase further in the coming years as other licensees decline. Insignia, which is the largest licensee, has already lost 100 advisers since the start of 2023.
“Given Insignia has indicated that Millennium3 and Godfrey Pembroke may leave soon, that would bring them down to 758, so Count-Diverger would be in second spot.”
Looking ahead, Count said it could see the potential for new equity partnership opportunities with the expanded network of firms across wealth, accounting and services segments. It also said it has a “healthy pipeline” of acquisitions to continue to pursue scale further.
Hugh Humphrey, chief executive of Count, previously spoke to Money Management about how the firm is keen to pursue acquisition opportunities.
“We are already overwhelmed with client demand for advice and are assessing how fast we can meet those needs while still growing sensibly. Even with the Affinia growth, there are still more people who need advice than we can service,” he said in May.
AUTHOR
Laura Dew
Recommended for you
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
Insignia Financial has experienced total quarterly net outflows of $1.8 billion as a result of client rebalancing, while its multi-asset flows halved from the prior quarter.
Prime Financial is looking to shed its “sleeping giant” reputation with larger M&A transactions going forward, having agreed to acquire research firm Lincoln Indicators.
An affiliate of Pinnacle Investment Management has expanded its reach with a London office as the fund manager seeks to grow its overseas distribution into the UK and Europe.
