Keybridge Capital has entered into an agreement with Aurora Funds Ltd to purchase its subsidiary Aurora Funds Management for $4.3 million.
The binding terms sheet is subject to Aurora shareholder approval, due diligence, third party consents and ASX approval.
The agreement consists of a $4.3 million all cash consideration with $3.5 million payable upfront, and $0.8 million deferred for 12 months subject to certain warranty adjustments, according to a statement on the ASX.
Aurora Funds Management, which entered into an enforceable undertaking with ASIC in November 2014, has collective retail funds under management of $180 million.
As part of the binding terms sheet, all Aurora employees will be offered employment agreements at Keybridge, with business to continue under the Aurora brand, said the ASC statement.
“Contemporaneously with the sale transaction, Aurora will seek shareholder approval to return a significant amount of its pro-forma capital to shareholders, for which Keybridge will receive 20 per cent as a result of its shareholding in Aurora,” said the statement.
The Aurora board of directors have voiced their unanimous support for the transaction subject to an independent expert’s report.
Keybridge chief executive Nicholas Bolton pointed out that his company is currently the largest shareholder in Aurora.
“Keybridge already has a strong relationship with [Aurora], and we are all pleased to welcome this capable and experienced team of alternative asset managers into the Keybridge Group,” Mr Bolton said.
“Aurora has established a long term track record of delivering risk adjusted returns through an economic cycle and this acquisition provides a strong opportunity to establish Keybridge as a growing, well capitalised Australian alternative funds management business,” he said.
“With high barriers to entry in domestic retail funds management this is a unique opportunity,” Mr Bolton said.