The agreement came into effect on 1 July and consists of an initial cash consideration of $0.74 million for the “leading financial planning practice” followed by deferred consideration of up to $0.56 million over the first 18 months.
In a statement, the Diverger board said the move reflects the company’s goal to be a “market leading provider of services to advisers”.
“The investment in MWM forms part of a broader strategy to invest in a number of practices and provide additional resources that assist in their next phase of growth,” the statement read.
“Investment in growing adviser practices enhances the contribution of Diverger’s Wealth Solutions division through increased share of earnings and recurring cash dividends.”
The move comes after Centrepoint Alliance (CAF) knocked back Diverger’s offer to acquire all shares in the firm for a combination of cash and Diverger shares valued at $0.325 per share offer price.
In a statement last week, the CAF board said it “does not believe the offer fairly reflects the strategic value of CAF”.
The firm said it will continue to advance its own pipeline of strategic and synergistic consolidation opportunities, noting that it remains well positioned to do so with $12.5 million cash in the bank, a strong management team, a profitable business and supportive shareholders.
“Centrepoint is well-advanced with plans to accelerate growth and diversify revenue by leveraging other capabilities such as Centrepoint Lending, scaling its investment business by extending its managed account offering, and investing in financial services technology to improve the efficiency of its advice processes,” it said.
CAF did, however, note that it would meet with Diverger next week to discuss the offer and will “update the market if necessary”.
Diverger entered the takeover bid, valued at a combined $63.6 million, with a 19.99 per cent share in Centrepoint Alliance it obtained via a call option with major shareholder Thorney Group.
Neil Griffiths
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
