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IOOF’s major acquisition advised by A&O
Allen & Overy has advised IOOF on its $1.44 billion acquisition of MLC Wealth.
Tony Zhang
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Firm: Allen & Overy (IOOF).
Value: $1.44 billion.
Deal: A cross-practice team from Allen & Overy has played a key role in IOOF Holdings’ $1.44 billion acquisition of superannuation and wealth management business MLC Wealth, a subsidiary of National Australia Bank.
Area: M&A.
Key players: A&O’s team on the deal comprised managing partner Jason Denisenko alongside Australian partners Meredith Campion, Michael Parshall, Tony Sparks, Adam Stapledon, Mark Leemen, Michael Reede, Peter McDonald, Jason Gray, Michael Shepherd and Ka Sen Wong, working with an international team including US partners Chris Salter and Bill Satchell and London Pprtner Kate Sumpter.
Deal significance: IOOF’s $1.4 billion takeover of MLC Wealth franchise will double its funds under management.
Chief executive Renato Mota said he had been a longstanding “admirer” of the MLC brand, anticipating the takeover would result in increases of up to $150 million a year within three years and bolster 20 per cent to the group’s earnings per share.
The deal would more than double the size of IOOF’s pool of managed funds from $202 billion to a headline figure of $510 billion, according to investor documents lodged with the ASX.
It would also take pole position in the $900 billion market for wealth management platforms, used by financial advisers to execute trades and manage assets on behalf of clients.
A&O’s advisory role spans all aspects of the deal, including due diligence, transaction structure, equity raising, debt funding and regulatory compliance.
A key feature of the deal, which is subject to ACCC and APRA approval, is funding via a jumbo $1.04 billion rights issue by IOOF, which was launched to institutional investors on 31 August 2020.
In addition to advising on this rights issue, the A&O team advised on a backstop facility and a subordinated note supporting the deal. It is also advising on ACCC and APRA compliance.
The deal demonstrated A&O’s sophisticated end-to-end deal advisory capability in a complex transaction that required many specialist A&O practice areas in Australia alongside the international A&O network across London, New York and Washington DC.
