Trust Co. completes $42M Guardian Trust acquisition

Trust Co. completes $42M Guardian Trust acquisition

By Paul McBeth

March 15 (BusinessDesk) –Trust Co., the ASX-listed trustee, has completed its $42 million acquisition of New Zealand Guardian Trust Ltd., which will add some $37 million of revenue in the current financial year.

Melbourne-based Trust Co. said the deal was at a multiple of less than five times Guardian Trust’s forecast for normalised full-year earnings before interest, tax, depreciation and amortisation of about $8 million. The acquisition is part of Trust Co.’s regional expansion, which has already pushed into Singapore.

“The acquisition and consequent increased scale of our operations allow us to enjoy greater cost synergies from the introduction of new information systems across our expanded business platform in three countries,” chief executive John Atkin said in a statement.

Australian insurer Suncorp Group took a $40 million hit on the sale as it wrote down the goodwill attached to the business. The sale was Suncorp’s second in as many months after it sold fund manager Tyndall Investments to Japan’s Nikko Asset Management for as much as A$128.5 million in November.

Guardian Trust has struggled in recent times, posting losses in the past two years as it took impairment charges on its Guardian Mortgage Fund with $249 million of investor funds. Guardian Trust ended up freezing withdrawals from the fund, and has come under fire from investors who eventually voted to wind it down.

Trust Co. said EBITDA was between A$15.7 million and A$18.7 million in the year ended Feb. 28.

The shares rose 0.5% to A$6.28 in trading on the ASX yesterday.

(BusinessDesk)

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