Bain Capital has revised its non-binding indicative proposal to acquire wealth management company Insignia Financial (ASX: IFL), matching an earlier announced revised bid by New York investment firm CC Capital Partners.
Both firms are now offering $4.60 cash per share for all of Insignia’s shares. The bids value Insignia at $3.085 billion.
Insignia reported Bain’s second revised indicative proposal on 23 January.
In response to each of the revised bids, Insignia offered limited-time, non-exclusive access to “certain non-public information”. The company said this access would be subject to conditions including signing confidentiality and standstill agreements.
Bain made an initial offer of $4 on 12 December. CC Capital then offered $4.30 on 3 January which was matched by Bain Capital on 11 January.
Both bidders sought exclusive due diligence. Both are also open to discussing structuring a transaction to provide Insignia shareholders with an opportunity to receive a proportion of their payout as stakes in an ultimate new holding entity for Insignia.
Insignia shares were trading around $4.50 after it announced Bain Capital’s second revised offer. In late December, the shares were trading just above $3.
Insignia has engaged Citigroup and Gresham Advisory Partners as financial advisers and King & Wood Mallesons as legal adviser.
Insignia, which has $228 billion in funds under advice, is in the early stages of a turnaround strategy under chief executive Scott Hartley who had previously led AMP and SunSuper. Hartley said in November that he expected to cut the company’s annual outgoings from $950 million at present to $800 million by 2028.
Insignia had come under criticism from large investors, including Tanarra Capital which holds a 15.2% stake in the company through its Long Term Value Fund, for its failure to adequately integrate major acquisitions, primarily MLC which it bought from National Australia Bank (NAB) in May 2021. MLC is one of Australia’s largest corporate superannuation businesses.
Tanarra, however, supported Insignia’s decision to reject Bain Capital’s initial offer.
On 10 December, Insignia announced it had entered into an initial agreement with global technology and fund administration business SS&C Technologies to simplify its master trust superannuation business into a single platform, a process that it expects to result in improved customer experience and cost efficiencies. A binding final agreement is expected to be completed during the first quarter of 2025.
Under the deal, technology and more than 1,000 staff, will be transitioned from Insignia to SS&C.
Insignia’s multiple master trust programs serve more than a million individual members.
In a second quarter 2025 financial year business update released on 23 January, Insignia reported it had completed IT separation of MLC from NAB. The company said this was one of the largest wealth management separations in Australian financial services history and the most important initiative it had to deliver in the 2025 financial year.
Funds under management or administration grew during the quarter to $326.8 billion supported by strong market growth and improved flows performance across several business channels.
During the quarter, the MLC Private Equity business achieved a first close for its fourth MLC Private Equity Co-investment fund which targets high-net-worth individuals and small institutional clients as investors. MLC Private Equity is targeting completing a final close “early in calendar year 2025”.
Insignia changed its name from IOOF in 2021. The business evolved from a friendly society, the Independent Order of Oddfellows, established in Melbourne 1846. Under its wealth management services, the company provides financial advice, superannuation, wrap platforms and asset management services to individuals, financial advisers and corporate employers.
CC Capital was founded in 2016 by former senior Blackstone executive Chinh Chu. The firm specialises in the use of special acquisition companies (SPACs) to acquire businesses. In 2019 Chu led a take-private acquisition of the US business of global credit reporting agency Dun & Bradstreet. Dun & Bradstreet US was re-listed on the New York Stock Exchange in 2020. Current CC Capital portfolio companies include global investment technology and advisory business Wilshire which CC Capital acquired in 2021.
Image: Insignia Financial chief executive Scott Hartley.