Shareholders in South Australian planning business the Mawson Group have accepted a $7.94 million offer from ING owned Millennium3.
The price will be cut if Mawson advisers fail to meet brokerage revenue performance criteria set out by the new owners.
The offer's base price is $5.5 million and is subject to Mawson advisers contributing at least $7.56 million in total gross brokerage. If that is not met the price is reduced proportionately.
On settlement there is also an additional payment of $440,000 to cover additional deal costs, such as redundancies and winding up the business. Finally, there is a payment of $2 million, to be paid in two instalments, which will be paid to advisers that sign on with Millennium3. This too is subject to conditions on brokerage levels.
"It will provide greater scale and is a natural fit with our proven business model of leveraging links with other advice professionals including general insurance brokers and accountants," said Millennium3 joint managing directors, Darryl Foster and Barry Martin.
Mawson's made a net profit of $46,562 for the financial year ended 30 June 2006, down from $352,880 the previous year and only the second profit in the previous five years of business.
The group has 104 advisers, including advisers of Aurora Financial Services and Mawson Securities, $42 million in-force risk premium, and $800 million in funds under advice.
Mawson advisers will be transferred to Millennium3 over the coming months.
The acquisition will expand Millennium3 to 600 advisers, $180 million in-force risk premium, and $5 billion in funds under advice.
"It is with sadness that we will see the Mawson name disappear ... It is a natural fit, with a similar culture, and the extra services that Millennium3 will be able to provide, will see our advisers enjoy even more success in the future," Mawson chief executive Peter Johnson said.
Johnson, who will be leaving the group, will receive a $75,000 redundancy payment.
Conditions to sale are expected to be satisfied by 30 June 2007.
