25/02/2009

Melbourne Wealth Advisory Business Acquisition

Plan B Group Holdings Limited (“Plan B” or the “Company”) is pleased to announce that it has acquired a 62% interest in Strategic Financial Management (“Strategic”), an established wealth advisory business based in Melbourne. Founded in 1995, Strategic has approximately $354 million of funds under advice with an average client portfolio value of $2.4 million.

Mr. Denys Pearce, Managing Director of Plan B commented, “In spite of the challenging market conditions facing the economy and particularly the financial services industry, we remain committed to pursuing our expansion strategy by seeking to acquire interests in exceptional wealth advisory businesses.

“Strategic is a high quality wealth advisory firm with a strong focus on understanding and addressing clients’ needs and providing the highest levels of service. Its operations are highly complementary to Plan B and we believe the business and its principals meet the highest standards of our strict acquisition criteria.”

The consideration for the acquisition of this initial investment will be the issue of 3,984,714 new ordinary shares (voluntarily escrowed for 12 months) and the payment in cash of $5.2 million from Plan B’s existing cash reserves. Option arrangements are in place concerning the remaining 38% of Strategic not owned by Plan B. The exercise dates of the options are staggered over the period to 30 September 2011, with the potential cash and scrip consideration payable by Plan B based upon multiples of the future earnings of the business. 

For the balance of the current financial year, Plan B management will be implementing group systems and integrating Strategic into the Plan B business model. Accordingly, it is anticipated that Strategic will make only a small net profit contribution in the current financial year. However, the business is anticipated to be earnings per share accretive on a full year basis. In addition, the integration process is expected to generate considerable operational efficiencies and earnings synergies in the future.

“We look forward to working with the staff of Strategic to enhance the continued growth of the business and improve the client experience even further,” Mr. Pearce said.