Tower sells NZ Trust business
Tower Trust in New Zealand has been offloaded for NZ$25 million ($22.5 million), after being deemed a non-strategically aligned business operation within the Tower group, to New York-based investment company Sterling Grace.
Ownership of the trust will transfer to Sterling Grace, which also made a strategic investment in financial services group OFM Investment last month, on July 31 subject to satisfaction of remaining conditions.
Sterling Grace is well known in Australia for the sale in 2001 of the Spicers/Monitor Moneywealth management group toAXA Australia.
Tower Trust in New Zealand provides personal and corporate trustee services and Tower Group managing director Keith Taylor says the sale is in keeping with ongoing plans within the group and the sale of parts of the business had been raised in the past.
“Tower has taken a number of steps to implement key strategic and operational initiatives aimed at refocusing its business and laying the framework for a turnaround in performance,” Taylor says.
“As we have said before part of that process is the ongoing review of the ownership of Tower’s businesses and their fit with our strategy for the future.”
This concentrated focus by the group excludes Tower Trust as a business and Taylor says while it remains a profitable and well managed company, it did not fit in with the group’s long term plans.
“We were approached by Sterling Grace and after they conducted due diligence, a purchase price of NZ$25 million was agreed,” he says.
The sale of the Trust business in both the New Zealand and Australian markets was flagged in July last year but was abandoned in November with the group stating they were part of a growth strategy and would be the best use of shareholder capital.
At the time Tower said it had been approached by a number of groups but due to a raft of changes in management and company structure had decided not to move ahead with the sale.
Taylor, speaking in November, said the bids for the business did not amount to what he thought the business was worth and he regarded the trustee business as being a close fit with the group’s renewed wealth management focus.
This sale will not affect the current ownership ofTower Trustin Australia however the New Zealand operations will retain the Tower name for a short time before likely taking on its former name of Trustees Executors.
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