Lonsec Holdings (Lonsec) is poised to further enhance its position as the pre-eminent provider of investment research, product ratings and managed account solutions as it announces today that its largest shareholder, Generation Development Group (GDG) is seeking to acquire 100% ownership of the Lonsec Group. Under the terms of the agreement, GDG will acquire the remaining interest in Lonsec for an upfront consideration of $197.4 million together with a deferred earn out payment of up to $55.7 million.
Lonsec 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.
Mike Wright, CEO of Lonsec, is pleased with the transaction, saying “This is an exciting time for Lonsec and a recognition of the strength of the business we and those before us have built for our clients since 1994. GDG has been a substantial shareholder of Lonsec since 2020 and has a strong understanding of the Lonsec business and is committed to supporting Lonsec in its strategic plans to grow further.
“GDG are an ideal acquisition partner, intending to continue to operate Lonsec predominantly as a separate business, which means continiuty of our existing product and service propositions for our clients. This transaction will enable Lonsec to accelerate plans for further investment into its business and we are enthused about the opportunities this deal presents for the business and our clients.”
Grant Hackett – CEO of GDG, echoes these sentiments and comments “Since we acquired an initial stake in Lonsec in 2020, we have witnessed the strong growth and success of the business driven by an excellent leadership team. We are excited to increase our exposure to the business and help shape the next phase of growth for Lonsec.”
Lonsec was supported through the transaction by Luminis Partners as lead financial adviser, together with Baker McKenzie, McGrathNicol and EY Australia.
Highlights
- Generation Development Group (ASX:GDG) acquired a minority holding in Lonsec Holdings (Lonsec) in September 2020,
- GDG to acquire the remaining 61.9% of Lonsec’s fully diluted share capital, to be funded by a Conditional Placement and Equity Raising by GDG
- On completion of the upcoming transaction, GDG will own 100% of the issued capital of Lonsec
- The transaction will be settled through a combination of cash and scrip consideration
- Subject to GDG shareholder approval, the transaction is expected to be completed in August 2024
- GDG is committed to supporting the existing Lonsec business, further enabling accelerated growth and delivering greater balance sheet strength
For more information, you can access the GDG ASX Announcement here.
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About Lonsec
Founded in 1994, Lonsec has grown to become a pre-eminent Australian provider of investment and superannuation research, product ratings and managed account solutions. Lonsec is positioned at the nexus of Australia’s financial advice and investment industry, helping clients and investors make better investment decisions.
Lonsec comprises of four businesses – Lonsec Research, Lonsec Investment Solutions, Implemented Portfolios and SuperRatings. It is the leading Australian investment research house, providing financial product ratings, market insights and portfolio construction tools to empower the financial advice industry.
Its research and rating services are consistently recognised as the best in the market for quality, breadth, and adviser support. Lonsec also provides award winning, high growth managed account solutions that consistently outperform benchmarks and deliver clear value-add to advisers and clients. As at 30 April 2024, Lonsec manages over $10bn in a range of managed accounts accessible through all core administration platforms.
About Generation Development Group (GDG)
Founded in 1991, Generation Development Group Limited (GDG) is an ASX-listed company that specializes in providing development capital to financial sector businesses. GDG has over the years provided development capital to financial sector businesses.
GDG’s 100% owned subsidiary – GenLife offers a range of Investment Bonds and annuities which are designed to provide tax-effective investment solutions for investors.
