Swiss private bank EFG International will acquire 51% of the Australian wealth manager Shaw and Partners for up to A$61m (£32.7m, $43.2m, €38.2m) via a combination of cash and EFG shares.
The deal is subject to regulatory approval in Switzerland and is expected to close in second quarter of 2019.
Shaw and Partners has a network of around 150 financial advisers and six offices across Australia. It has around A$15.9bn assets under management, as of February 2019.
Giorgio Pradelli, chief executive of EFG International, said: “With this acquisition, EFG will expand its market position in the Asia Pacific region into Australia, in line with our strategy to focus on markets that offer superior growth potential.
“The combined growth potential of this partnership will enable us to double our size in the Asia Pacific region by 2022.”
The co-chief executives of Shaw and Partners, Earl Evans and Allan Zion, will remain in their executive roles and are expected to jointly hold a 25% stake.
Chinese expats
EFG International believes the acquisition will provide “immediate access” to the Australian market and strengthen the bank’s China offshore business.
It said: “Australia is one of the most attractive and fastest growing wealth management markets worldwide.”
Shaw and Partners’ clients, who are mainly invested in Australian equities, will benefit from EFG’s product offering across asset classes and gain direct access to international markets, the firm said.
At the same time, EFG will use the partnership to strengthen its “penetration” of the Chinese offshore high net worth market in Australia.
Finances
The agreed consideration will be paid via a combination of cash and up to 3.4 million of newly issued EFG shares.
The transaction will have a “marginal impact” on EFG’s strong capital ratios.
Some 70% of the total consideration will be paid at closing with the remaining balance to be paid in two instalments, on 30 June 2020 and 30 June 2021.
All issued shares will be subject to a three-year lock-up period, subject to proportionate release over that time period.
Payment of the second and third instalments is subject to “downward revision based on the achievement of agreed assets under management and revenue thresholds”.
