Prime Financial announces plans for 2 acquisitions

Prime Financial Group (PFG) is looking to acquire a payroll administration business and is in talks with a Melbourne-based wealth management company.

The deals follow previous acquisitions of SMSF platform Intello in October 2022 and alternative asset manager Altor Capital in February 2024, which is looking to double its revenue to $50 million in FY2025.

“PFG is focused on its strategy of further EPS-increasing acquisitions with the goal of increasing the customer base to which it can offer ongoing services and provide access to distribution of PFG-sourced products, services and transactions,” he said.

The first transaction entered into by the advisory, capital and asset group is a binding agreement to acquire 100% of the shares in Equity Plan Management (EPM) and related businesses operated by Remuneration Strategies.

EPM is a Melbourne-based company that provides compensation and employee share plan administration services.

The total transaction value is up to $5.7 million, including an initial consideration of $2.8 million and potential deferred payments of up to $2.9 million over two years.

According to Prime Financial, the acquisition marks its entry into the compensation and employee stock program management sector and will expand its business advisory and consulting capabilities.

The “exciting” acquisition opportunity broadens Prime’s footprint in a business segment focused on emerging companies, increases customer diversification through cross-selling and provides a favorable financial profile with strong recurring revenue.

Simon Madder, Prime CEO and Managing Director, said: “We are delighted to expand our offering in emerging business segments with the acquisition of EPM, a market leader in its category.

“Entering into the employee share plan management industry is a logical next step for Prime. It provides us with a highly complementary product suite that complements our existing business consultancy offering and provides significant cross-selling opportunities across our combined customer base.

Potential wealth management takeover

Prime also announced that it has entered into a confidential, non-binding indicative offer (NBIO) to acquire the Melbourne-based company, which offers investment research, portfolio and asset management services.

The potential transaction will complement Prime’s existing asset segment and offer operational, customer and opportunity synergies.

“If the potential acquisition materializes, the acquisition will be a significant contributor to revenues in FY25. This target is expected to generate approximately $12 million in revenues in FY24,” the company said.

The company is expected to be financed 50% in cash and 50% in shares within three years.

The NBIO remains incomplete and requires due diligence, agreement on final terms and obtaining the necessary shareholder approvals.

In February 2024, Prime reported 38% revenue growth in its wealth management business in 1H24 as it strives to achieve a revenue target of $100 million by FY30.

Madder has previously signaled the company’s intention to complete more acquisitions in the fund management space as it weighs organic growth initiatives and external acquisitions equally.

“I think you can expect more acquisitions and more growth (from Prime). The theme of the day is growth in terms of where we are going, and we are fortunate to be in this industry,” the CEO said in February.