Introduction to Equity Story Group Ltd’s Latest Acquisition
Equity Story Group Ltd, also known as the Company, has made a significant announcement regarding its latest business move. The Company has entered into a binding heads of agreement (HOA) to acquire the business and assets of Baker Young Limited, a full-service financial advisory firm based in Adelaide.
Transaction Overview
The acquisition of Baker Young Limited involves a purchase price of A$4.2 million. This amount is broken down into an upfront payment of $3 million, subject to adjustments, and an earn-out component of $1.2 million. The earn-out component is payable subject to certain conditions being met over a 10-month period following the completion of the transaction. Equity Story intends to fund this acquisition through debt.
Key Terms of the Agreement
In addition to the purchase price, Equity Story will issue 10 million options to the Seller’s nominees upon completion of the transaction. These options can be exercised over a 3-year term at an exercise price of 5 cents each. Half of the options are escrowed for 6 months, and the remaining are escrowed for 12 months from the date of completion. The Company plans to seek shareholder approval for the issue of these options under Listing Rule 7.1.
Financial Impact and Outlook
The acquisition of Baker Young Limited is expected to have a positive financial impact on Equity Story Group Ltd. It is anticipated to be earnings-accretive, contributing significantly to the Group’s revenue and recurring income. The transaction includes a profit-share model for Baker Young advisers and staff, which will attract more advisors as the Equity Story Group expands. This move aligns with the Company’s strategy of identifying and pursuing selective M&A opportunities that deliver accessible, high-quality wealth services to retail and high-net-worth investors across Australia.
Conclusion
In conclusion, Equity Story Group Ltd’s acquisition of Baker Young Limited is a strategic move that aligns with the Company’s commitment to delivering high-quality wealth services. The transaction is expected to be earnings-accretive and will contribute to the Group’s revenue and recurring income. With the inclusion of a profit-share model, the Company is well-positioned to attract more advisors and expand its services. This acquisition is a significant step forward for Equity Story Group Ltd, and its impact on the Company’s financial outlook is expected to be positive.
