HUB24 acquisition prompts Xplore Wealth share price spike
Shares in investment platform provider Xplore Wealth have risen 216% since the announcement of its acquisition by HUB24 for $60 million.
According to FE Analytics, shares were trading at $0.066 prior to the announcement and rose to $0.19 the following day.
However, they have been muted over the past year with share price growth of just 3% over one year to 28 October, 2020. Since the start of the year, they had risen 10%.
This was in comparison to its acquirer, HUB24, which had seen its shares rise 89% since the start of the year and 70% over one year. The ASX 200 had lost 7% over both time periods.
HUB24 told investors it believed the Xplore acquisition would add material scale to the platform business with a further $23 billion in funds under advice while delivering access to new capabilities including global and domestic bonds and additional scale in international listed securities and foreign currency.
HUB24 also outlined its plans to strengthen its position as the leading provider of integrated platform and data and technology services. This included the acquisition of Xplore Wealth for $60 million, of Ord Minnett’s non-custody portfolio administration and reporting service for $10.5 million and exiting its position in Paragem.
Xplore Wealth chair, Alex Hutchison, said the HUB24 offer was “highly compelling” for Xplore Wealth shareholders in light of the consolidation in the platform market.
“The Australian investment platform market is undergoing significant consolidation driven by the rapid change in the advice and wealth management sectors. Contribution factors include the benefits of economies of scale, heightened regulation and a sharp focus on the best interest of consumer served by advisers and best-of-breed administration tools and technology,” he said.
AUTHOR
Laura Dew
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