M&A

Diverger picks up 35% of GPS Wealth licenced financial planner; Centrepoint deal looms

Mon 04 Jul 22, 1:10pm (AEST)
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Key Points

  • Diverger will pay GPS Wealth $740k to acquire a 35% equity interest in McGregor Wealth Management (MWM)
  • Diverger sees MWM as valuable asset within larger expansion plans
  • Diverger to update market in near future on Centrepoint Alliance deal

Financial services player Diverger (ASX:DVR) has today revealed it will acquire 35% of GPS Wealth’s McGregor Wealth Management (MWM) for an initial $740k. 

MWM is headed by Rob McGregor, a co-founder of GPS Wealth, and specifically markets itself as a retirement financial advisory service. 

The entity is legally allowed to operate in Australia under an active AFSL. 

Acquisitions now for gains later 

Diveger notes today the acquisition underpins its desire to shift into developing other companies. 

Diveger will provide support to MWM over the coming years as it builds up from here and earns more revenue. 

All things going to plan, the equity interest allows Diverger to guarantee its delivery of recurring cash dividends in a not too distant future. 

Notably, Diverger expects to make $250k per annum in revenue through MWMas its 35% share of a larger $700k total.

McGregor Wealth not the biggest fish on the hook 

Last month, Diverger made a takeover bid to Centrepoint Alliance (ASX:CAF) to acquire the latter for $64m. 

Diverger is a microcap at $32m, and so is Centrepoint, only slightly higher at $43m. 

The $64m offer reflected a value above the CAF share price in late June, however, Centrepoint’s board has recently rejected the offer

The two entities continue to negotiate, and investors are just going to have to wait to see what falls out of the woodwork.

If successful, the takeover will form a larger entity worth some $100m with a superior operational scale.

Diverger profit breakdowns included in its half year report to the end of December 2021
Diverger profit breakdowns included in its half year report to the end of December 2021

 

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Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication. Email Jon at [email protected].

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