IRESS has agreed to acquire Financial Synergy, a privately-owned Australian firm offering fund administration software to the superannuation and wealth management industries, for a cash consideration of up to AUD90m ($68.5m).
In order to fund the acquisition, IRESS is launching a fully underwritten institutional placement of about 7.49 million shares to raise around AUD85m.
At the same time, existing eligible shareholders in Australia and New Zealand will have the opportunity to buy additional shares through a non-underwritten share purchase plan.
The deal is anticipated to close by 31 October 2016, and is expected to be more than 2% EPS accretive in 2017, IRESS said.
IRESS CEO Andrew Walsh said: “Financial Synergy is an established and respected software solution provider and is a logical addition for IRESS in Australia. It strongly complements our existing capabilities and focus in Australian financial services, trading and funds management technology, wealth management and advice. It is also in line with our growth strategy.
“IRESS currently provides a range of solutions to key segments of Australian financial services, underpinned by the growing superannuation industry. Financial Synergy increases the range and scale of services and solutions IRESS can provide to clients of both businesses.”
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Based in Melbourne, Financial Synergy employs 126 staff. The firm is being sold by its majority owner and founder David Orford.
“Selecting the right home for Financial Synergy to see its objectives enhanced and our people and clients prosper has been an important part of this process. I have always held IRESS and its team in high regard and I'm excited to see these two businesses combine,” Orford said.
The senior management team will be retained following the acquisition, with Stephen Mackley to continue heading the Financial Synergy business unit in IRESS.