CAF currently owns 55 per cent of AAP’s shares through the holding company Centrepoint Wealth (formerly Professional Investment Holdings).
AAP provides practice management support services to more than 180 boutique Australian Financial Services licensees.
The company is structured as two entities – AAP and AAP2 – and CAF currently owns 55 per cent of the shares in both.
Under the proposed acquisition, AAP shareholders will receive 1.25 CAF shares for each AAP share and AAP2 shareholders will receive 1.16 CAF shares for each AAP2 share.
CAF completed its acquisition of PIS via the merger with Professional Investment Holdings in December 2010.
In June 2012, CAF reported a loss before tax and non-controlling interests of $14.5 million – largely due to the payment of claims to clients of PIS and the costs associated with responding to an Australian Securities and Investments Commission enforceable undertaking.
More than $11 million was paid out in claims settlement during the 2012 financial year, and close to $17 million was provisioned against future claims in June 2012.
Professional fees associated with the enforceable undertaking cost CAF $3.7 million in the 2012 financial year, and following an actuarial report, additional provisions of $11 million for unreported claims were set aside.
