Prime Financial announced the acquisition of investment research and fund management business Lincoln Indicators earlier this week, in an effort to expand its presence in the high-net-worth and wholesale investor market.
Speaking during a webinar on Wednesday, Prime’s managing director and chairman, Simon Madder, said the company is keen to shake off its “sleeping giant” label as it looks to ramp up its mergers and acquisitions (M&A) activity.
“Larger transactions will become a hallmark of what we’re doing and to some extent, we’ve been a little bit of a sleeping giant over the last two to three years with respect to building out that capability in that shared service model,” Madder said.
“Although we’ve been in business for the last 26 years, it’s really the last three to four years where we’ve really started to accelerate. It doesn’t mean we won’t do a transaction that’s got $5 or $6 million revenue, but we’re equally talking to some that have $13 or $14 million in revenue.”
Prime’s operating model is built around two core divisions: the business segment and the wealth segment.
The business segment delivers accounting and business advisory services, as well as capital and corporate advisory. Meanwhile, the wealth segment focuses on wealth management, asset management and SMSF services.
Prime Financial’s recent M&A activity includes the acquisition of alternative asset management firm Altor Capital in February 2024 and Equity Plan Management (EPM) in July 2024. It also acquired SMSF administration service provider Intello in October 2022.
During the webinar, the firm confirmed that it is on track to double its revenue from $26 million in FY2021–22 to $50 million in FY2024–25. It then intends to double this to $100 million within three to five years.
While organic growth is a part of the overall plan, inorganic growth forms a key part of the firm’s strategy, with the Lincoln Indicators acquisition considered crucial for the business.
“We’ve now got a very nice funnel in terms of how we can offer more solutions into a growing market,” Madder said on the Lincoln acquisition.
The total consideration for Prime’s acquisition of Lincoln is $15.7 million, based on achieving target EBITDA performance across four tranches. However, this could rise to $17.9 million if earnings targets are exceeded.
In an ASX statement earlier this week, the firm said: “The acquisition provides Prime with additional tools and services for the high-net-worth and wholesale investor market, including research and information for self-directed investors through to managed investment solutions complemented by Prime’s existing full investment, wealth management and SMSF services.
“Lincoln Indicators’ large client base adds significantly to Prime’s distribution capabilities with the ability to deliver its services, advice and products into this client base, many of which have been clients of Lincoln Indicators since inception over 20 years ago.
“As well as complementing Prime’s existing wealth offering, Lincoln Indicators also provides Prime with numerous operational, client and capability synergies and cross-sell opportunities into the wider group.”
Madder added: “We look forward to bringing our two businesses together with a respect for the legacy and client base that Lincoln Indicators’ co-founder and managing director, Tim Lincoln, and the team has built. Prime has a successful track record of working with founders and has a significant number as part of its leadership team.”
Announcing its full-year 2023–24 financial results last year, Prime reported annual revenue of $40.8 million – a 21 per cent increase from $33.7 million in the previous financial year. In Prime’s two key operating segments, the wealth division saw a revenue growth of 24 per cent to $18.8 million and its business revenue rose by 19 per cent to $21.8 million.
