The synergies of the Skandia and Intech businesses would strengthen IOOF’s position in the Australian financial services market, according to IOOF chief executive Tony Robinson.
“It’s a great acquisition, the price is attractive and parts that they’re operating in we also operate in,” he said.
“So the acquisition is relatively low risk, a good price and a core business – you couldn’t look for a better outcome.”
The acquisition had been evaluated and pursued jointly by IOOF and Australian Wealth Management (AWM).
The transaction represented an excellent opportunity to further build both the short- and long-term growth prospects of the business, AWM managing director Chris Kelaher told InvestorDaily.
“Both companies had been looking at it and clearly because AWM is many times larger than IOOF, when you put them all together it’s highly attractive,” he said.
Following the completion of the acquisition there would be a review of management structure, Kelaher said.
“Post merger with IOOF, I will be the managing director of that company and given that the company is buying Skandia, then it’s most likely that I will be the managing director of the combined group,” he said.
Yesterday IOOF Holdings announced the acquisition of Skandia Australia and Intech Investments from the Old Mutual Group.
The total purchase price will be around $34 million, comprising an upfront payment of $20 million to be paid on completion and a further payment to be made approximately 60 days after completion.
The completed acquisition is scheduled to occur around 6 March 2009 and is intended to integrate with IOOF’s proposed merger with AWM.
AWM will provide a component of the funding via a $10 million loan facility.
