Wealth platform HUB24 (ASX:HUB)
is set to acquire 100 per cent of the cloud-based wealth technology company Class (ASX:CL1)
after entering a scheme implementation deed.
HUB24 expects the proposed transaction to accelerate its platform as a provider of integrated platforms, technology and data solutions for financial advisers, accountants, private banks, licensees, stockbrokers and their clients.
Under the proposed acquisition, Class shareholders will receive 1 HUB24 share for every 11 Class shares held, plus $0.10 per Class share. The total consideration represents a 52.8 per cent premium based on the 1-month VWAP for both companies up to last Friday. Based on the closing price of HUB24 shares last Friday, the offer to Class shareholders implies a value for Class of $3.11 per share and a market capitalisation of $386 million.
Both companies share aligned values that focus on delivering solutions that support professional advisers and accountants to implement investment, tax and strategic advice, according to HUB24. It is intended that Class will operate as a business unit within the HUB24 group under the Class brands and leadership team.
The acquisition of Class is expected to be 8 per cent earnings per share accretive (excluding revenue synergies and one-off implementation costs) to HUB24 shareholders by FY23 and deliver cost synergies of approximately $2 million per annum. The Class board has unanimously recommended that Class shareholders vote in favour of the scheme
“Class are market leaders in the establishment, management and administration of wealth and SMSF solutions. The completion of this transaction will combine two exceptionally talented teams with a common purpose to empower better financial futures for Australians and provide a unique range of products and services for financial professionals and their client,” said managing director Andrew Alcock.
Subject to the relevant conditions being satisfied, the scheme is expected to be implemented mid to late February next year.
Shares in HUB24 (ASX:HUB)
are trading 0.8 per cent lower at $32.80. Meanwhile, shares in Class (ASX:CL1)
are up 60.8 per cent at $2.91.