MA Financial Group has announced the acquisition of Melbourne-based specialist real estate investment management firm IP Generation (IPG) for a fixed consideration of $90.4 million predominately in MA Financial shares.
Following the acquisition’s completion, IPG will be integrated into MA Financial’s asset management platform, providing a boost to its real estate assets under management (AUM) to $8 billion, and an overall AUM of approximately $12 billion.
Moreover, IPG’s 29 real estate investment professionals will join MA Financial’s asset management arm to create a real estate funds management platform managing around $8 billion in core, alternative and real estate credit assets.
The $90.4 million purchase price equates to a multiple of 7.9x the normalised EBITDA for FY2023–24. The acquisition includes an upfront payment of $80.0 million, to be made entirely in MAF shares, which will be issued subject to vesting conditions.
An additional $10.4 million in deferred consideration will be paid in 12 months’ time, split equally between cash and MAF shares.
The integration of IPG with MA Financial is expected to generate significant synergies and scale efficiencies and is anticipated to enhance MA Financial’s underlying earnings per share for FY24–25 on a full-year pro forma basis.
This announcement follows MA Financial’s reaction to media speculation of the said acquisition on Wednesday, advising that it had engaged in discussions with the real estate manager.
IPG was established in 2018 and manages around $2 billion of retail shopping centre assets across 10 funds that own 14 shopping centres located across NSW, Queensland, Victoria, and Western Australia on behalf of high-net-wealth investors.
Commenting on the acquisition, joint chief executive of MA Financial Julian Biggins said IPG has an “impressive track record in securing assets, raising capital and delivering strong returns to its investors”.
“[IPG’s] complementary, high growth real estate funds management platform will give [MA Financial’s] real estate asset management business immediate additional scale, expanded and diversified distribution channels and an increased Melbourne presence and investor base,” Biggins added.
IPG’s founder and CEO, Chris Lock, will assume the role of head of core real estate at MA Financial after the acquisition’s completion. Lock will be responsible for the performance of the core real estate business and its funds, supported by IPG chief operating officer Ingrid van Dijken.
Additionally, IPG chairman David Blight and director Greg Miles are slated to join MA Financial’s real estate asset management team in leadership roles.
Biggins added that the “strategic and complementary” acquisition will build scale in MA Financial’s core real estate business “at an attractive once-in-a-cycle opportunity in the real estate market”.
“We have a long association with IP Generation and its senior leaders, and strong cultural alignment sharing a founder philosophy, entrepreneurial mindset, and investor-led approach.
“The integration of our teams will deliver significant synergies and scale benefits, deepening our real estate platform to around 250 professionals offering a breadth of expertise across origination, investment management, development and property management capabilities.
“This acquisition will mutually benefit our many investor clients, which aligns with our philosophy of achieving win-win outcomes for clients, shareholders and staff,” he said.
Lock remarked on the “strong cultural fit and alignment” of the two entities, believing that “the scale of the combined business enables us to deliver even better opportunities and investment returns to all our clients in the future.”
Biggins concluded: “The transaction presents an opportunity to combine IP Generation’s track record and investor base with MA Financial’s balance sheet and capital-raising capabilities to fast-track growth.”
“Additionally, there is potential for earnings enhancement and platform synergies to be realised on the operating side, including within MA Financial’s shopping centre management business, RetPro.”
The transaction is expected to complete in early 2H25.
