Wealth management applications provider, Bravura Solutions, has reached agreement with Powerlan Ltd to acquire Garradin Pty Ltd for at least $10 million.
The final sale price depends on Garradin Portfolio Investment Management Solutions' (Garradin) performance during the agreed 12-month earn-out period.
The acquisition of Garradin will increase Bravura's client base to more than 175 financial institutions globally, and make it the largest managed accounts software provider by assets under management to Australian fund managers.
Bravura will gain about 20 staff under the acquisition and expects to integrate Garradin's operations into the company's existing offices in Sydney and Melbourne.
Bravura Group CEO and managing director, Iain Dunstan, said the company is well positioned to acquire and grow the Garradin business as there are strong synergies between the companies.
He said both have significant experience in developing software solutions for the financial services industry.
"One of the key reasons we pursued Garradin is its retail portfolio management expertise with SMAs (Separately Managed Accounts) and IMAs (Individually Managed Accounts)," Dunstan said.
"Our alignment with Garradin complements and significantly strengthens Bravura's strategic position in the managed accounts market - a market that is expanding at a rapid pace globally.
"There are also exciting cross-selling opportunities between our companies, and the expertise of Garradin's staff will significantly improve Bravura's consulting, development, support and testing capability for existing and potential clients.
"Additionally, this acquisition reinforces Bravura's position as a leading application provider for Wrap accounts."
Dunstan said further acquisitions will be considered in line with the ongoing strategic direction of the Group.
However, Bravura's acquisition is subject to further due diligence and is expected to be completed in late June 2007.
"The merger builds on the seven acquisitions Bravura has already made since it was established in 2004," he added.
Powerlan CEO, Jon Newbery, said the acquisition is the next step in taking Garradin's offering to a wider market.
"The deal with Bravura has the full support of Powerlan's board. It provides further value to our shareholders and is in the best long-term interests of our clients and employees," Newbery said.
"The sale also enables management to continue to focus on the Clarity Next Generation OSS business and provide further support to ConverterTechnology and IMX.
"This agreement is further proof of Powerlan's capacity to develop emerging businesses for the benefit of our shareholders, as we did with FinancialBPO, which we nurtured and subsequently sold in 2005 to Computershare."
More than 18 million pension, life insurance and investment accounts are administered on Bravura software, with more than $800 billion in funds under management.