Connie Mckeage
Overview
Iress (IRE.ASX) has announced that it has entered into a Scheme Implementation Agreement with OneVue Holdings Limited (OVH.ASX), (“OneVue“) under which Iress will acquire 100% of the outstanding shares of OneVue (the “Scheme”).
Under the terms of the Scheme, OneVue shareholders will be entitled to receive consideration of $0.40 per share for their OneVue shares (the “Consideration”).
The Consideration represents a 67% premium to OneVue’s closing share price on 28 May 2020 and a 19% premium to OneVue’s 12-month VWAP.[3]
Entry into the Scheme Implementation Agreement follows a period of exclusive due diligence. Implementation of the Scheme remains subject to a number of conditions but is not subject to financing.
Strategic acquisition
Iress chief executive, Andrew Walsh, said: “With structural shifts and changing market dynamics, our strategy is to continue to generate long-term growth opportunities, leveraging technology and automation, while helping clients achieve efficiency, compliance and growth.
“The combination of OneVue’s strength and position in administration of managed funds, superannuation, and investments, with Iress’ strength in software and data will drive innovation through technology. This includes the development of software and services that brings advice and investments closer together, resulting in greater efficiency and productivity for professional advisers and businesses in Australia.
“OneVue has scale in managed funds administration as the largest single third-party fund registry in Australia[4] and there is opportunity to build on OneVue’s business.
“I am pleased that OneVue’s managing director, Connie Mckeage, will continue to play an important role during the transition period and will consult to us on growth, strategy and clients after completion.”
Recommendation of the OneVue Board
The full OneVue Board of Directors unanimously recommends that OneVue shareholders vote in favour of the Scheme in the absence of a superior proposal and subject to an Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of OneVue shareholders. OneVue Managing Director, Connie Mckeage, said: “We are pleased to have entered into an agreement with Iress to acquire OneVue. The offer represents a premium to our current share price and a full cash offer provides compelling certainty for our shareholders.
Iress is a company we have significant respect for and we know they are committed to continuing to deliver high levels of service and excellence to our clients and are looking forward to working more closely alongside our clients and partners.”
Matters relating to Sargon
Iress has conducted extensive due diligence on OneVue and its business and has considered the implications of OneVue’s claims to the Sargon receivables and the surrounding arrangements. As previously announced by OneVue, it has significantly written down the value of those receivables in OneVue’s accounts to $3.86m. The Consideration has been arrived at taking these matters into account and Iress considers that they have been appropriately addressed in the context of this transaction.
OneVue is overseeing the sale of Madison Group as a result of security arrangements associated with the Sargon receivable. The Madison Group is not owned by OneVue and that will not change as a result of the Scheme or those security arrangements.
About OneVue
OneVue provides a range of funds management, superannuation, and investment solutions. OneVue supports financial services by providing efficient and effective technology and service solutions to its clients.
With around 250 employees based in Australia, largely in Sydney and Melbourne, OneVue operates the largest single third-party fund registry in Australia with approximately $490 billion in assets across[1],383 funds.
Consideration
Under the terms of the Scheme, OneVue shareholders will be entitled to receive Consideration of $0.40 per share in cash.
The Consideration represents approximately:
- a 67% premium to OneVue’s closing price of 24 cents per share on 28 May 2020, being the last trading day before the announcement of the Scheme;
- an 84% premium to the VWAP of OneVue shares over the month ending 28 May 2020, of 22 cents per share, being the last trading day before the announcement of the Scheme;
- a 61% premium to the VWAP of OneVue shares over the 6 months ending 28 May 2020, of 25 cents per share, being the last trading day before the announcement of the Scheme; and
- a 19% premium to the VWAP of OneVue shares over the 12 months ending 28 May 2020, of 34 cents per share, being the last trading day before the announcement of the Scheme.
The Consideration represents an implied equity value of approximately $107m.[6]
Scheme Implementation Agreement
The Scheme is subject to the Conditions Precedents set out in Schedule 2 of the Scheme Implementation Agreement, which include:
- receipt of ACCC and other regulatory approvals;
- approval by OneVue shareholders and the Court; and
- customary commercial conditions, including:
- the Independent Expert concluding, and continuing to conclude, that the Scheme is in the best interests of OneVue shareholders; and
- no “material adverse change” or “prescribed events” occurring.
Other key details
The Scheme Implementation Agreement also contains customary exclusivity provisions including “no shop” and “no talk restrictions”, and matching rights in favour of Iress in respect of any competing proposals. A break fee is payable to Iress in certain circumstances.
Full details of the Scheme are set out in the Scheme Implementation Agreement attached as Annexure A.
Funding
The Scheme will be funded through a portion of the funds Iress receives from an equity raising which it is currently conducting and which is comprised of a fully underwritten placement to raise $150 million, and a non-underwritten Share Purchase Plan to eligible shareholders, targeting to raise approximately $20 million.
Indicative Timetable
Subject to Court approval, OneVue intends to send a Scheme Booklet to OneVue shareholders in early August 2020. The Scheme Booklet will contain information relating to the Scheme, including the reasons for the Directors’ recommendation and details of the Scheme meeting. The Scheme Booklet will also contain an Independent Expert’s Report providing an assessment as to whether the Scheme is in the best interests of OneVue shareholders.
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