Financial advisory and asset management firm Prime Financial Group (ASX: PFG) has acquired Brisbane-based alternative asset manager Altor Capital, marking the second acquisition in two years as the company progresses its plans to double revenue to $50 million by 2025.
Altor Capital, which was co-founded in 2015 by Harley Dalton and Ben Harrison, is being acquired for an initial consideration of $1.5 million and up to $4.2 million on an earn-out basis over the next three years.
The alternative asset manager invests in a range of assets including equity, hybrids, options and term debt, with Prime noting that the acquisition includes the company’s two core fund strategies covering private equity and private credit.
Altor is expected to deliver annualised revenue of about $1.8 million to Prime with the earn-out subject to Altor maintaining annual EBITDA of about $700,000 over the next three years.
Prime says the acquisition brings on board a funds management platform developed by Altor over the past six years that covers distribution and administration, providing the group with the capability to launch new products in the alternative asset management space.
Prime says it plans to leverage this capability and build out a diversified alternative asset management business under its Wealth Management offering.
“Our goal is to double group revenue between FY22 and FY25 to $50 million, through organic and inorganic activity, enhancing our capability across advice, capital and asset management for our business and wealth-segment clients,” says Prime's chairman and managing director Simon Madder.
“Our results over the last five years demonstrate that Prime is delivering on our material growth aspirations.”
Melbourne-based Prime, which has $1.15 billion in funds under management, posted revenue of $33.7 million in FY23, up 28 per cent on the previous year.
The increase was aided by the acquisition of business-to-business (B2B) self-managed superannuation fund administrator Intello in 2022 for $4.6 million.
Both the Intello and Altor acquisitions have been funded by a $10 million acquisition facility secured from Westpac (ASX: WBC) by Prime in 2022.
Madder says the revenue increase achieved by Prime in recent years has been driven by ‘strong organic growth’ as well as the Intello acquisition.
“(The) acquisition of alternative asset fund manager Altor means we are well placed to deliver on our goal of doubling revenue to $50 million in FY25 and then doubling that figure again to $100 million within three to five years of FY25,” he says.
Altor team of seven will join Prime’s Brisbane office while Dalton and Harrison will become part of the leadership team.
“In Prime we have found the optimal long-term partner to leverage the alternative asset platform we have built over the last six years,” says Dalton.
“Like Prime, we share a client-focused culture. The support Prime offers, combined with the autonomy of our investment and distribution teams, will ensure we continue to strive to deliver attractive returns to our clients.”
Dalton notes that Prime has a clear strategy to grow organically and through acquisitions and the team is pleased to be joining a group that is ‘highly focused on being a leading provider of alternative assets’.
“The transaction is an exciting and important strategic step forward for our clients and employees,” he says.
Prime says the acquisition is expected to make a ‘modest contribution’ to EBITDA in the current financial year.
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