Generation Development Group Limited (GDG) (ASX: $GDG) has unveiled its intention to acquire the remaining 61.9% of Lonsec Holdings Pty Ltd's share capital for $197.4m. The acquisition will be funded through a Conditional Placement and an Equity Raising of approximately $155.4m. The company aims to raise the funds through a fully underwritten Institutional Placement and an Accelerated Non-Renounceable Entitlement Offer. The proceeds from the Equity Raising will be used to fund the Acquisition and associated transaction costs. The acquisition of Lonsec is expected to provide GDG with full ownership of a highly strategic asset in the wealth management sector and is anticipated to be immediately accretive to the company's earnings. Lonsec is a leading provider of investment research, product ratings, and managed account solutions with a strong market position and a highly resilient revenue model. The acquisition is expected to be completed in August 2024, subject to customary closing conditions and related GDG shareholder approvals.
The company has successfully completed the institutional component of the Equity Raising, raising approximately $126m through the Institutional Placement and the Institutional Entitlement Offer. The Retail Entitlement Offer will open on 7 June 2024 and is expected to close on 21 June 2024. Eligible retail shareholders will be able to subscribe for one New Share for every 3.98 existing GDG shares held at the Offer Price of $1.95 per New Share. The company has applied to have its Pooled Development Fund (PDF) registration revoked, which is a condition to the completion of the Acquisition under the Statement of Shareholder Agreement (SOSA). GDG's operational activities and other regulatory licenses are not impacted by the revocation of its PDF status. However, the revocation will result in the company ceasing to be entitled to a concessional tax rate on its income and gains, and shareholders will be subject to the usual dividend rules for taxation purposes.
Generation Development Group Limited (GDG) (ASX: $GDG) has announced its plans to acquire the remaining 61.9% of Lonsec Holdings Pty Ltd's share capital for $197.4m. The acquisition will be funded through a Conditional Placement and an Equity Raising of approximately $155.4m. The company aims to raise the funds through a fully underwritten Institutional Placement and an Accelerated Non-Renounceable Entitlement Offer. The proceeds from the Equity Raising will be used to fund the Acquisition and associated transaction costs. The acquisition of Lonsec is expected to provide GDG with full ownership of a highly strategic asset in the wealth management sector and is anticipated to be immediately accretive to the company's earnings. The Retail Entitlement Offer opens on Friday 7 June 2024 and closes at 5.00pm (Sydney time) on Friday 21 June 2024. Shareholders should consider the risks associated with the Entitlement Offer and consult their professional tax adviser before participating. The announcement also includes details on the purpose of the Placement and Entitlement Offer, the Top-Up Facility, underwriting, issue of New Shares, ASX quotation, application monies, market prices for Shares on ASX, taxation implications, rights and liabilities attaching to New Shares, privacy, governing law, and required actions for Eligible Retail Shareholders in Australia and New Zealand.