Australia’s largest privately-owned financial adviser group, Synchron, has been acquired by WT Financial Group, creating a business with more than 600 advisers and $16 billion in funds under advice.
WT Financial Group was the parent company of advice licensee and dealer group Wealth Today.
The acquisition would be “highly synergistic and accretive to earnings” and on settlement, scheduled to occur this week, would see the company’s business-to-business operations to encompass Wealth Today, Sentry Group and Synchron, making WT Financial Group the largest independent advice network in Australia, the group said in the announcement to the Australian Securities Exchange.
The move would create the largest independent financial adviser network in Australia, with more than 610 advisers, over $16 billion in funds under advice (FUA) and more than $360 million in-force annual insurance premium as well as more above $25 million of new insurance premium sales per annum.
Following the acquisition, WT provided FY23 guidance of EBITDA (earnings before interest, taxes, depreciation and amortisation) of above $7 million and net profit after tax (NPAT) of $4 million.
Synchron founders Don Trapnell and John Prossor would continue working in the business with Trapnell assuming the role of chairman of WTL’s Synchron subsidiary.
The company explained that a total vendor consideration for the acquisition would be up to $7.96 million payable in a combination of cash and shares over two years, subject to various terms and conditions, and WT Financial Group would also assume liabilities of around $3 million and would expect to incur transaction and integration costs of between $1-2 million bringing the anticipated total value of the acquisition to $12-13 million.
To assist with funding of the acquisition, WTL completed a placement on 11 March of 30.5 million new shares at $0.10 each to institutional and professional investors to raise $3.05 million, underscoring investor confidence in the company and the financial advice sector.
Commenting on the acquisition, WTL chief executive, Keith Cullen, said: “The acquisition cements WTL as the largest independent – or non-institutionally-owned, non-product producing financial adviser network in Australia establishing the right scale of operations to enable us to provide the critical supports advisers in our modernised industry demand.”
“Selling Synchron into WTL represents the next stage of growth for our company. With WTL’s focus on outcomes for its advisers, and its strong strategic direction, I am confident that the Synchron business will benefit from integration into the WTL business – with advisers from each of the cohorts benefiting from a broader base of personnel and programs to help support and grow their businesses,” Trapnell, added.
“Both myself and John Prossor are excited at becoming shareholders of WTL and we both look forward to contributing to the expanded group operations and to creating further value for all WTL shareholders”.
