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OneVue acquires Australia's Select Fund Services and Select Investment Partners

Wednesday, August 27, 2014
Opalesque Industry Update - OneVue Holdings Limited (OneVue) has agreed to acquire Select Asset Management Limited, trading as Select Fund Services and Select Investment Partners Limited. Completion is expected to occur tomorrow. Select Fund Services (SAML) is a specialist provider of responsible entity (RE) services and one of Australia’s leading REs for multi-asset trusts.

The business also provides services to leading single strategy managers and access to Australia via unit trust fiduciary services for global offshore groups. Select Fund Services acts as RE for groups such as Neuberger Berman and Smarter Money Investments (50% owned by Yellow Brick Road) who are also clients of OneVue. It has a 12 year track record in fiduciary and RE services with a stable and experienced operations, technology and compliance team.

Select Investment Partners (SIPL) is a specialist multi-asset investment manager and implemented portfolio consultant with a track record of over 12 years managing diversified multi-asset portfolios. The business is based in Sydney with 15 people. SIPL works with financial planners to enable them to offer Customised Portfolios to their clients.

“The acquisition follows OneVue’s stated objective to grow the company organically and acquisitively and is strategically important in delivering value added services to both OneVue’s Fund Services and Platform Services’ clients“, said Connie Mckeage, CEO of OneVue. The consideration for the Select businesses will be paid $2.7m in cash and $4.3m in OneVue scrip. There is also an incentive component, payable in scrip, for total revenue growth above an agreed threshold in Select Investment Partners during FY2015. Shares issued will have an escrow period of up to 12 months. The cash component will be funded from existing cash holdings.

A summary of the key terms is attached.

Brendan Foley, Chairman and CEO of Select, said, “Having worked successfully with OneVue over the last year on a range of projects from unit registry and mFund services to the development of a managed account solution for our customised portfolio solutions, we have seen the complementary nature of our respective client lists and service offerings. By merging the businesses, the current value proposition s for our respective clients will be enhanced.”

Select and OneVue are complementary businesses. SIPL strengthens OneVue’s superannuation trustee business, MAP Funds Management. SAML’s services enhance OneVue’s existing Fund Services offering by creating a broader suite of unit registry, RE services and mFund distribution.

One of the cornerstones of the transaction is the strong cultural fit of the businesses, and that OneVue’s management capabilities are broadened and deepened.

The acquisition is expected to deliver a number of key financial benefits for OneVue:

  • Retail Funds Under Management and Administration (FUMA) will increase from $1,940m to $2,609m (Excludes one asset consulting contract prior to the acquisition advised as winding up in Nov 2014)
  • Total Funds under Supervision (FUS) from RE and trustee services will increase from $711m to $1,614m as at June 2014
  • Select’s consolidated revenue was $7.1m in FY 2014. Revenue included incentive fees earned in the Investment Partners business of $1.6m and paid on returns in excess of a bank bill benchmark
  • OneVue expects that the transaction will be accretive on an EBITDA per share basis in FY2015
  • Revenue impact by offering RE services as part of a broader offering to domestic and international custodians and investment managers
  • Cost and capital synergies identified

Select employees will join OneVue at their Sydney office. Brendan Foley, Chairman and Chief Executive Officer of Select, will be appointed Deputy CEO of OneVue and two other Select directors will be appointed to the executive team . “This acquisition will enable us to more effectively deliver a broader range of client solutions. I welcome our new shareholders and I am delighted to be working with a team of people who are aligned with the OneVue team in their thinking and equally committed to making a difference” Connie Mckeage, CEO of OneVue, concluded.

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