Australian Wealth Management (AWM) intends to continue expanding its distribution channels following the majority stake purchase of Ord Minnett.
AWM announced to the market yesterday it had purchased 70 per cent of the broking and financial services group.
"We've been working on this transaction for 18 months. It has been a long time being negotiated," AWM managing director Chris Kelaher told InvestorDaily.
"The main thing that attracted us it's one of the major broking houses that is looking to make a transition from pure execution more towards wealth management and financial planning, which is more in keeping in the style with our other business which is Bridges [Financial Services]."
AWM has not ruled out acquiring the remaining 30 per cent stake from JPMorgan, however, the company has no intention to merge Ord Minnett with Bridges, Kelaher said.
"No, it's not even being considered. It doesn't require that," he said.
"We have an underlying theme, essentially we want to have one factory with multiple distribution points and this is another premium distribution point alongside Bridges.
"We're constantly in discussions with different people. We have a record of being active in this space, we're always considering and talking. But whether that translates into anything remains to be seen."
Under the terms of the acquisition, Ord Minnett will operate as a stand alone business. The company's existing management team and chairman will remain unchanged.
The listed wealth management firm acquired its stake in Ord Minnett from the Ord Minnett Staff Trust and directors of Ord Minnett in exchange for 47.6 million new AWM shares.
JPMorgan and AWM have entered into a shareholders agreement regulating their relationship as shareholders in Ord Minnett.
The parties expect to complete the transaction in early June.
