â¢ Key acquisition extends GBSTâs financial transaction services into wealth management, wrap and master trust administration
â¢ Acquisition to be funded through
- $36.46 million in cash (from reserves and new $20 million debt facility)
- Issue of approximately 4.95 million GBST shares to vendor
â¢ Acquisition is expected to be EPS accretive in FY08, pre intangible amortisation
â¢ Acquisitionâs annualised FY08 EBITDA expected to exceed $7.0 million
â¢ The acquisition will become effective on or about 1 September 2007
â¢ Provides GBST with a UK presence and a strategic platform for continued growth
GBST Holdings Limited today announced the acquisition of wealth management software solutions provider, InfoComp Pty Limited for $56 million, with $36.46 million payable in cash and the remainder payable in GBST shares to be issued to vendors.
InfoComp is a strong fit with GBST, and an important step in GBSTâs strategy to broaden its technology platform for the financial services sector and will complement GBSTâs broker services business. InfoComp is the leading provider of funds administration and registry software to the Australian wealth management industry, and the dominant provider to Australian wrap and master trusts. Its products include the Composer, Conductor and Unison brands.
The transaction will be funded from reserves and a $20 million debt facility through GBSTâs banker. In addition, GBST will issue 4.95 million shares which will be held in voluntary escrow for 3 years. InfoComp is expected to achieve more than $7 million annualised EBITDA in FY2008, and annualised revenue of more than $30 million. After completion GBST will have 50 million shares outstanding.
The combined businesses will have over 250 staff at six locations - Sydney, Melbourne, Brisbane, Wollongong and Adelaide and London.
InfoComp founders and vendors Rob DeDominicis and Ray Tubman will join GBSTâs executive team and continue to drive the business. InfoComp will become GBSTâs wealth management arm, managed by Rob DeDominicis.
GBST Chief Executive Officer, Mr Stephen Lake, said: âWe are excited by this acquisition, which is a major step in GBSTâs strategy to diversify its services to the financial services industry. InfoComp is a great business, and we are delighted to welcome Rob DeDominicis, Ray Tubman, and all InfoComp staff to GBSTâs team. The companies are a good cultural fit, sharing recurring revenue licence models, a strong professional service capability and focused development and support teams. This provides a substantial new platform for growth and a beachhead into the United Kingdom market.
âThe investment is very sound. The InfoComp business has been profitable since inception, with long term customer contracts and a strong record of repeat business. Significant wealth management growth opportunities exist in the UK, where InfoComp has sold its flagship Composer wealth management and funds management system to one of the UKâs largest banks, and the growth prospects for the business are very strong.â
Robert DeDominicis said: âInfoCompâs management and founding shareholders are delighted to join forces with GBST. InfoComp was founded almost 2 decades ago and is now entering a new phase of business expansion into new markets and product features. We believe there are synergistic opportunities to integrate our software products and that merging with GBST will make a significant difference to the growth of the business.â
GBST has identified short, medium and long-term product synergies that will be evaluated post-transaction. The immediate focus will be management integration and familiarising staff with the overall business. No retrenchments are planned or anticipated. The wealth management and broker services businesses will be supported by shared corporate and human relations resources. There will be no change in services to customers.