Australia's Trustee Partners wins over Complectus, scuttling $150M IPO
By Paul McBeth
May 18 (BusinessDesk) - Australian corporate trustee firm Trustee Partners has won over New Zealand's Complectus, which owns the Perpetual Guardian supervisory business, with an offer that was attractive enough to trump plans for a $150 million initial public offering.
The companies today said the Overseas Investment Office has granted approval for Trustee Partners to buy Complectus, implying the deal was at least $100 million, being the threshold for requiring government approval when no sensitive land is involved, and the deal is expected to be wrapped up in coming weeks.
Perpetual Guardian was the brainchild of Andrew Barnes, who began buying trustee firms in 2013 with the acquisition of Perpetual Trust and later went on to buy Guardian Trust. Since then the group has purchased Covenant Trustee Services, Foundation Corporate Trust and New Zealand Trustee Services and now oversees more than $130 billion of assets. He had planned to raise $150 million in a public float of the company last December but put it off citing volatility in the markets.
"We commenced an IPO process last year, which resulted in a significant number of approaches from both trade participants and private equity organisations," Barnes said today. "Ultimately the offer from Trustee Partners was too strong to ignore."
Accounts filed with the Companies Office show Perpetual Trust reported a loss of $331,000 on revenue of $4.9 million in the 12 months ended June 30, 2016, compared to a profit of $59,000 on sales of $6.4 million. The unit paid a service fee to Guardian Trust of $5.3 million in 2016, compared to $5.6 million in 2015.
Separately, Guardian Trust's accounts show it generated a profit of $8.8 million on revenue of $43.6 million in the year ended June 30, largely unchanged from a profit of $8.8 million on sales of $44.2 million in 2015.
Trustee Partners managing director Philip Kingston said the Complectus acquisition gave his firm an entry point into New Zealand, which is an attractive market with "favourable industry and demographic trends".
The Melbourne-based firm is a unit of Sargon Capital, set up by entrepreneurs Kingston and Aron D'Souza. It was established last year and says it wants to use different risk management techniques and new technology to provide a more client-friendly service than existing firms.
Trustee Partners will take on existing Complectus staff and management, including chief executive Grant Kemble.