Prime Financial Group's strategic acquisition move

Prime Financial Group (ASX:PFG) has unveiled plans to acquire a Melbourne-based company specializing in investment research and asset management services. This potential acquisition aims to enhance PFG's Wealth Management segment with operational and client synergies. If successful, it is expected to contribute significantly to the company's revenue starting FY25, with the target company projected to generate $11.4 million in revenue in FY24.

Summary of Prime Financial Group's acquisition update

Prime Financial Group's proposed acquisition of a Melbourne-based investment research and asset management company is a strategic step to bolster its Wealth Management segment. The acquisition aims to provide significant revenue contributions from FY25, leveraging synergies in operations and client management. The transaction is structured to be funded 80% by cash and 20% by shares, with payments spread over three years. The company plans to utilize its debt facilities and cash reserves for the cash component. The acquisition process remains under negotiation, subject to due diligence, final terms agreement, and shareholder approvals. This move aligns with PFG's corporate strategy of growth and impact through strategic acquisitions.

Executive commentary on acquisition strategy

The acquisition, if completed, is expected to significantly enhance our Wealth Management segment by providing operational, client, and capability synergies.