Diverger announces investment in McGregor Wealth Management
Diverger has announced its purchase of a 35% stake in McGregor Wealth Management (MWM) for an initial cash consideration of $0.74 million, followed by deferred consideration up to $0.56 million during the first 18 months.
Announcing to the Australian Securities Exchange (ASX), Diverger said the purchase formed part of its strategic intent to be a market leading provider of services to advisers and that the agreement had been executed on 1 July, 2022.
“The investment in MWM forms part of a broader strategy to invest in a number of practices and provide additional resources that assist in their next phase of growth,” Diverger said.
“Investment in growing adviser practices enhances the contribution of Diverger’s Wealth Solutions division through increased share of earnings and recurring cash dividends.”
The deferred consideration of $0.56 million over 18 months would be subject to agreed earnings targets, Diverger said.
Expected earnings before interest, tax and amortisation (EBITA) contribution from MWM was based on a run rate EBITA of $0.70 million per annum for which Diverger’s share would be $0.25 million on an equity accounted basis.
This investment was separate and above the existing practice service fees received from MWM.
Diverger’s investment in MWM followed its proposal to acquire Centrepoint Alliance last month.
AUTHOR
Liam Cormican
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