Prime Financial announces plans for 2 acquisitions

Prime Financial Group (PFG) is looking to acquire a remuneration administration business and is in talks with a Melbourne-based wealth management firm.

The deals follow previous acquisitions of SMSF platform Intello in October 2022 and alternative asset management firm Altor Capital in February 2024 as it seeks to double its revenue to $50 million in FY25.

“PFG is focused on its strategy of pursuing further EPS-accretive acquisitions with the aim of increasing the client base it can offer current services to and provide access to distribution for PFG originated products, services and transactions,” it said.

The first deal the advice, capital and asset management group has entered into is a binding agreement to acquire 100 per cent of Equity Plan Management (EPM) and the associated business conducted by Remuneration Strategies.

EPM is a Melbourne-based firm that provides remuneration and employee share plan administration services.

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The deal’s total consideration is up to $5.7 million, including an initial consideration of $2.8 million and potential deferred payments of up to $2.9 million over two years.

According to Prime Financial, the acquisition marks its entry into the remuneration and employee share plan management sector and will also expand its business advisory and consulting capabilities.

The “compelling” acquisition opportunity expands Prime’s business segment focus for emerging businesses, increases customer diversification through cross-selling and has a favourable financial profile with strong recurring revenue.

Simon Madder, Prime chief executive and managing director, said: “We are delighted to be expanding our emerging business segment offering through the acquisition of EPM, a market leader in its category.

“Entering into the employee share plan management sector is a logical next step for Prime. It provides us with a highly complementary product suite that adds to our existing business advisory offering and provides significant cross-sell opportunities across our combined client base.”

Potential wealth management acquisition

Prime also announced it has executed a confidential non-binding indicative offer (NBIO) for the acquisition of a Melbourne-based company that offers investment research, portfolio and asset management services.

The potential deal will complement Prime’s existing wealth segment and offer operational, client and capability synergies.

“If the potential acquisition proceeds, the acquisition would represent a material contribution to revenue in FY25. The target is expected to generate approximately $12 million revenue in FY24,” the firm stated.

It is expected to be funded 50 per cent in cash and 50 per cent in shares over a three-year period.

The NBIO remains incomplete and is subject to due diligence, agreement of final terms and obtaining necessary shareholder approvals.

In February 2024, Prime reported a 38 per cent revenue growth in its wealth management division for 1H24, as it strives towards its $100 million revenue target by FY30.

Madder previously signalled the firm’s intention to complete more acquisitions in the funds management space as it equally weighs its organic growth initiatives and external acquisitions.

“I think you can expect more acquisitions and more growth [from Prime]. Growth is the theme of the day in terms of where we’re heading, and we’re so lucky to play in this industry,” the CEO said in February.