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EFG to take a majority stake in Shaw and Partners
Posted on Thursday, 14 March 2019 10:17
EFG International, in a move to increase its presence in the Asia-Pacific region, is buying a 51.0 per cent stake in Australian financial services provider Shaw and Partners for AUD 61.20 million (USD 43.30 million).
The purchase price implies a valuation for 100.00 per cent of shares at 2018 price-to-earnings ratio of 11x and a price-to-assets-under management ratio of around 0.8 per cent.
Under the terms of the deal, 70.0 per cent of the cash and stock consideration will be paid upon closing, with the remaining 30.0 per cent to be paid in two tranches on 30th June 2020 and 30th June 2021.
Shaw and Partners’ management and employees will continue to hold a 49.0 per cent stake in the business, with co-chief executives Earl Evans and Allan Zion together retaining 25.0 per cent of the company.
The target is billed as one of the preeminent investment and wealth management firms in Australia, with a network of 150 financial advisers in six offices across the country.
Established in 1987, its partners include Bloomberg, Sky News, CNBC and Pershing, and it had total assets under management of AUD 15.90 billion, as of February 2019.
The transaction allows EFG access into the Australian market, which has a growing economy and the third largest concentration of high-net-worth individuals in the Asia-Pacific region.
A deal will also strengthen the buyer’s offshore business in China, and broaden its investment finance services internationally.
Giorgi Pradelli, chief executive of EFG, said the transaction would enable the company to double its size in the Asia-Pacific region by 2022.
Allan Zion, chief executive of Shaw and Partners, said that the deal allows the target access to over 200 research analysts, as well as increasing the resources and overall scale of the business.
Headquartered in Zurich, EFG provides private banking and asset management services through a network of businesses in 40 countries worldwide.
For the financial year ending 31st December 2018, it had total assets under management of CHF 40.16 billion (EUR 35.31 billion), down from CHF 41.61 billion in the previous 12 months.
The transaction, which will be funded through a combination of cash and shares, is expected to complete in the second quarter of 2019, subject to regulatory approval in Switzerland.
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