Two deals from two financial groups yesterday have again confirmed the push to sell non-relevant assets continues in the wake of the Hayne royal commission.
Financial groups from the Commonwealth Bank, to Westpac, the ANZ, AMP, the NAB, now Suncorp, Bendigo and Adelaide, IOOF and Bank of Queensland have sold what were once key assets in offshore businesses (but not NZ) in Asia and Europe, in insurance, funds management, financial advice and allied areas in Australia
Yesterday the Commonwealth Bank confirmed it had wrapped up the sale of Count Financial Group while Suncorp revealed it was selling its smash repair business.
Suncorp’s sale is the biggest in value terms. It is selling most of it’s Capital S.M.A.R.T. smash repair business to AMA Group for $420 million.
Suncorp will keep a 10% holding in the business as well as a seat on the Capital S.M.A.R.T Group Holding entity board and will enter an initial 15.5-year strategic partnership with Capital S.M.A.R.T., which will allow its customers access to the business.
Suncorp said after-tax profit on the sale is expected to be in the range of $275 million to $295 million.
Suncorp will also sell its auto parts supplier ACM Parts to AMA for $20 million.
“The increasing complexity of repairs is driving significant change in the smash repair and parts procurement industry, and the divestment means Suncorp can focus on its core Insurance and Banking operations,” Suncorp newish CEO, Steve Johnson said in a statement on Tuesday.
The sale follows Suncorp scrapping of its so-called marketplace strategy in August to refocus on banking and insurance and away from trying to be all things financial to customers and potential clients.
The AMA transaction follows a strategic review of the Capital S.M.A.R.T business and evaluation of the long-term outlook.
Meanwhile, AMA shares went into a trading halt on Tuesday as it announced plans for a $216 million equity raising to fund the deal.
The equity raising will comprise a one for 4.5 pro-rata accelerated non-renounceable entitlement offer to raise about $139 million, and a placement of approximately 67 million shares to raise about $77 million.
Approximately 188 million new ordinary AMA shares will be issued.
“We are excited to combine Capital S.M.A.R.T’s best-in-class capabilities in low to medium severity panel repairs with AMA’s industry leading platform across the smash repair market,” AMA chief executive Andy Hopkins said in a statement.
Meanwhile, the CBA said in a short statement yesterday morning that the sale of Count Financial Limited to ASX-listed CountPlus Limited had completed.
“The transaction marks a significant milestone in CBA’s decision to exit its aligned advice businesses,” the bank said.
“CBA is committed to continuing to support and manage customer remediation matters arising from past issues at Count Financial.
“As previously announced, CBA will provide an indemnity to CountPlus of $200 million and all claims under the indemnity must be notified to CBA within four years,” the bank added.
In connection with the indemnity, CBA says it is undertaking a remediation program to identify and directly contact affected customers, and compensating them where required.
