Australia-headquartered platform provider Praemium has decided, following a strategic review, to sell its international operation.
In its June 2021 quarterly update, chief executive Anthony Wamsteker commented: “The international business had a standout quarter, with record inflows and FUA exceeding A$5bn (£2.7bn, $3.7bn, €3.16bn) for the first time.
“We will continue to execute on our on-boarding of new clients and opportunities. As separately announced today, the strategic review of Praemium’s international business has reached a conclusion and the board believes an alternative owner would better realise the full potential of the international opportunity.”
Rightly proud
Mark Sanderson, managing director of Praemium’s UK & international business, commented: “The group board recognises, and is rightly very proud of, the international team’s achievements to date.
“It can see the clear potential for capitalising on the international business’s strong growth over the last couple of years.
“However, it also recognises that realising that impressive potential requires a parent focused on the markets in which the international business operates.”
Sanderson continued: “We have not formally begun a sale process yet. However, since announcing our strategic review back in May we have received a great deal of interest from a diverse range of parties.
“Hardly surprising when you look at our recent growth trajectory and consistently high service and satisfaction rankings in independent surveys.
“That said, the fit and focus of any potential owners has to be right for us and right for our clients.”
Strong interest
In a separate divestment announcement, the board said that “the proposed divestment will allow Praemium to focus its financial and leadership resources on further accelerating its growth trajectory in the Australian platform market, for the benefit of all shareholders”.
The statement continued: “Pleasingly, the strategic review highlighted the technological leadership of the international platform operations and the strong sales and revenue momentum that the business is currently enjoying.
“However, in a marketplace undergoing significant structural change and consolidation, the business remains at a scale disadvantage to its key competitors.
“As a result, the Praemium board believes an alternative owner of the business will simplify the group, better serving the interests of its clients and better advancing the career opportunities of its employees.”
Praemium said it has received unsolicited, strong interest from potential buyers. Deloitte has been appointed to manage the sale process.
Attractive proposition
Following the news, Ian McKenna, founder of AdviserSoftware.com and the Financial Technology Research Centre, said that the Praemium international business “should attract significant attention from potential UK purchasers, especially in the platform and asset management space”.
“Advice tech businesses are already very much in vogue with private equity firms and over the last decade, most of the independent practice management systems have been acquired by platforms or asset managers. This includes Abrdn’s purchase of Focus Solutions in 2010, Invesco‘s purchase of Intelliflo, Schroder acquiring Enable via the purchase of Benchmark Capital, and Transact parents Integrafin buying Time4Advice at the start of this year.
“The Plum system has recently had a major overhaul to upgrade to technology to use Microsoft Dynamics in a very similar way to Time4Advice.
“It is rare for an independent practice management system to become available, especially one that has recently had a major technology upgrade. There are many reasons why this could be a very attractive purchase for several organisations,” McKenna added.
