- WT Financial Group (WTL) enters a share purchase deal to acquire financial advisory company, Sentry Group, for $7 million
- WTL believes the buy is financially beneficial, will expand its offering and position it for growth
- The $7 million will be split into a combination of cash and shares, with the cash to be funded through a $5 million placement
- The placement will issue over 46.6 million shares at 7.5 cents which marks a 25 per cent premium to WTL’s closing price on June 9
- Both the placement and acquisition are subject to shareholder approval and if this is given, they’ll be finalised on July 19
- Company shares last traded at 6.2 cents
WT Financial Group (WTL) has entered a share purchase deal to acquire Sentry Group for $7 million.
WTL entered a trading halt on June 10 stating it was finalising an acquisition and associated placement.
The acquisition
Acquiring Sentry Group, a financial advisory company, is set to position the company well for future growth.
WT Financial Group and Sentry provide similar licensing solutions however, as each company has restructured its operations over the past three years, they’ve focused on perfecting different aspects that, once merged, will form a highly-complementary and expanded offering.
Additionally, the acquisition of Sentry Group is expected to result in a net profit after tax of more than $2 million and total revenue to be above $70 million for the 2022 financial year.
The placement
The initial purchase price of $7 million will be made up of 50 per cent cash and the remaining 50 per cent in the form of WTL shares to the Sentry selling shareholders.
WTL is funding the cash consideration through a $5 million placement with $1.5 million of this to cover the acquisition and integration costs.
The placement will issue 46,666,667 shares at 7.5 cents each to investors. The issue price represents a 25 per cent premium to WTL’s closing price on June 9.
Depending on whether WTL achieves a certain revenue figure for the FY22, it may pay up to a further $3 million to the sellers through a combination of cash and shares.
The placement is subject to WTL shareholder approval, which will be sought at a general meeting scheduled for July 16. The company’s board has also agreed that shareholders should have the opportunity to approve the acquisition of Sentry.
Should they be approved, the placement and acquisition are expected to be completed on July 19.
Company shares were trading 13.9 per cent lower at 6.2 cents at the end of Monday’s session.