Financial services group Hub24 [ASX:HUB], known for its services in wealth management, superannuation, investments, tech, and data solutions in Australia, has announced a new agreement with software group myprosperity.
The finance group says it will be taking over the software corporation via a complete buy-out, by which Hub will essentially acquire 100% of myprosperity shares.
Hub24’s Managing Director Andrew Alcock described myprosperity as a leading provider of client portal technology with a full team of high talent.
The acquisition is expected to deliver long-term shareholder value by accelerating Hub24’s platform of the future strategy while boosting growth and competitive advantages.
HUB has fallen more than 3% in the past week’s trade. However, it has gained 4% so far in CY2023 and is riding high in its sector average by 23.5% and 18% above the S&P 200:
Source: TradingView
HUB24 to acquire and integrate myprosperity
myprosperity shareholders will receive a total consideration of $40 million of HUB’s ordinary shares issued at 30-day VWAP (at $27.63), which consists of 1.4 million issued shares.
There may be an option for a further $11.5 million in HUB ordinary shares, subject to certain conditions over a three-year period such as performance hurdles being met, successful integration, and revenue synergy targets of $7.2 million in FY24 increasing to $21.2 million in FY26.
The reasons listed for its decision included expectations of long-term shareholder value, which the group believes will accelerate Hub24’s platform of future strategy.
HUB says it will receive more support for its current growth trajectory, which will also see its competitive advantages strengthened, better placing it in the pathway for capturing markets and creating new growth opportunities.
HUB says myprosperity has a unique capability that, when linked with HUB’s own, will help consolidate the group’s position as a leading provider of integrated platforms, tech, and data solutions.
Integrating myprosperity into Hub24’s platforms will precede development of single client portals for all the group’s portfolio of products and services.
Both groups are expecting an improved client experience with a streamlined service delivery and an increase in productivity, with more financial empowerment for all involved.
myprosperity will operate as a separate business unit within the HUB24 group under the myprosperity brand, while technology and services will be shared between the companies.
Alcock commented:
‘We’re excited to be announcing the acquisition of myprosperity, who are a leading provider of client portal technology for advisers and accountants, and welcome Peter McCarthy and his talented team to HUB24.
‘This acquisition will consolidate our market-leadership position and accelerate the delivery of our platform of the future strategy, strengthening our competitive advantage to capture further market share and new growth opportunities.’
Transaction costs are expected to be around $400,000 for FY23, and a target completion date has been scheduled for 30 June.
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Regards,
Mahlia Stewart,
For Money Morning
