In an ASX statement on 23 July 2024, the firm said Generation Development Group (GDG) shareholders demonstrated overwhelming support for GDG’s acquisition of Lonsec. Over 93 per cent of votes cast were in favour for the key resolutions.
Completion of the acquisition is expected to take place in August 2024.
Rob Coombe, non-executive chairman of GDG, reiterated the proposed benefits of the deal in progressing the company’s growth vision.
“GDG’s acquisition of the residual equity interests in Lonsec represents a significant and exciting step in progressing our growth strategy. Lonsec is already well known to GDG, with strong knowledge of its operations and management team, having made our initial investment in 2020. Completing this acquisition will allow GDG to consolidate Lonsec’s financial performance and access 100 per cent of its cash flows,” he described at the EGM.
“This acquisition of Lonsec will provide GDG with full ownership of a highly strategic asset in an attractive segment of the wealth management sector. We believe that Lonsec is well positioned for future growth supported by strong industry and regulatory tailwinds and is expected to provide access to resilient recurring revenue streams from its core research offering.
“Further, we believe the acquisition will allow GDG to utilise the Lonsec Investment Solutions business as a base to consolidate other managed account businesses and deliver significant growth.”
The acquisition was first announced on 3 June 2024, with the firm confirming it had entered into a binding agreement to acquire the remaining shares in Lonsec that it does not yet own. It will be funded by a conditional placement of $49.2 million to Lonsec shareholders and an equity raising of approximately $155.4 million.
Following its “highly successful” investment in Lonsec in September 2020, a move from 49.2 per cent to 100 per cent ownership provides an opportunity for GDG to take full control of a familiar asset with further expected significant growth upside.
Commenting on the transaction at the time, Lonsec issued a statement noting that it considers GDG to be a “highly logical partner to accelerate the next phase of Lonsec’s growth”.
“The proposed transaction, which is subject to approval by GDG shareholders, will enable Lonsec to further accelerate its organic and inorganic growth strategy by providing greater access to capital, an expanded product suite and greater market access. The proposed acquisition presents multiple growth avenues to Lonsec including further development of Lonsec Investment Solutions and M&A opportunities,” the firm said.
