convoys 21m acquisition of ipp falls through

Convoy, which employs more than 1,500 advisers and which has been listed on the Hong Kong Stock Exchange since 2010, had announced last July that it would acquire Singapore-based IPP Financial Services for HK$162.24m ($21m, £13m).

IPP is also a major force in the Asian advisory industry, with more than 400 employees working out of offices in Singapore and Hong Kong, according to its website.

Market sources said it was thought that the Singaporean regulator, the Monetary Authority of Singapore, had failed to approve the deal, but this could not be confirmed, and IPP said such reports were "not true". An MAS spokesman said the authority "does not comment on our dealings with individual parties".

According to IPP,  the “proposed transaction…lapsed unconditionally as it did not meet the self-imposed deadline and conditions stipulated” in the July 2011 sales agreement.

For its part, Convoy also called attention to wording in the “sale & purchase agreement”, which stated that the deal would “terminate” if certain “conditions…including but not limited to all necessary legal and regulatory approvals having been obtained…the due diligence investigations… having been completed, and the result of such…investigations being satisfactory to [Convoy]”.

Convoy chairman Quincy Wong Lee Man added: “During the acquisition process, Convoy has always been supporting the work of regulators and is well-prepared for uncertainties and fast-changing economic environment.”

Convoy Asia expansion to continue

Although the IPP transaction had not gone ahead, Wong Lee Man said Convoy nevertheless will persevere with its plan to become “one of the largest independent financial advisory companies in Asia” by acquiring and developing insurance agencies, brokerages, investment consultancies and independent advisory companies in the region.

Mainland China is one of the company’s key target markets, as was reflected in its acquisition last September of an 80% interest in a Chinese company licensed to provide insurance brokerage services to mainland clients, and its opening in Bejing the previous month of a wealth management centre.

Founded in 1993, Convoy Financial Services Holding claims to be Hong Kong’s largest independent insurance and MPF schemes brokerage firm. It is a member of the Professional Insurance Brokers Association, and is registered as a Mandatory Provident Fund Corporate Intermediary.

In the year to the end of December it reported an 18% decline in earnings, to HK$53m ($6.83m,£4.2m), on revenue that grew 14% to HK$652.88m. In its results statement published in March, Convoy said the growth in revenue had been helped by the expansion of its consultant team, as well as an internal incentive programme “for the purpose of recognising and rewarding” its consultants for their work.

Revenue derived from insurance-linked assurance schemes accounted for approximately 97% of the revenue generated in 2011, down slightly from the previous year’s 97.9%.

Because it is privately held, IPP is not required to publish its revenue and earnings data. However, according to its website, it has more than S$2.25bn in assets under advice in Singapore (see below).

Included in its operation is what it calls the IPP Expat Advisory Group (EAG),  which specialises in looking after expatriates and international private clients, and which is headed by Ian Pryor, a British expatriate.