06/10/2014 - 10:46

Findex to take over Crowe Horwath

06/10/2014 - 10:46

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Shares in accounting firm Crowe Horwath surged on the news it had finalised an acquisition proposal from Financial Index Wealth Accountants for about $137 million, following five months of negotiations.

Findex to take over Crowe Horwath

Shares in accounting firm Crowe Horwath surged on the news it had finalised an acquisition proposal from Financial Index Wealth Accountants for about $137 million, following five months of negotiations.

The takeover, valued at 50 cents per share, would result in the privatisation of the Crowe Horwath business in Australia and New Zealand.

Alceon, Crowe Horwath’s major shareholder, has entered into an option agreement with Findex to sell its 19.87 per cent stake for 50 cents per share.

Findex said the bid had full support of Crowe Horwath’s board, which is recommending shareholders accept the offer in the absence of a superior proposal.

“After careful consideration, the board has unanimously concluded that the proposal from Findex is a compelling proposition, offering Crowe Horwath shareholders a significant premium to the market price and fair value,” Crowe Horwath chairman Richard Grellman said.

Findex said if the deal went ahead it would ascribe an enterprise value to Crowe Horwath of around $200 million and an equity value of $137 million.

"Our group has acquired and successfully integrated businesses on more than 80 occasions since 2000 and Crowe Horwath itself is the result of a 'roll up' strategy executed over a similar period," Findex chief executive officer Spiro Paule said.

“Our corporate history demonstrates we are proven long term owners and buy businesses with the intention of adding and unlocking further value. 

“It will be business as usual for Crowe Horwath clients, principals and staff but over time we are confident clients will notice and appreciate further enhancement to the already high level of service.

“The addition of the Crowe Horwath business in Australia and New Zealand will create an important strategic pillar in Findex, allowing the group to strike a more balanced service offering between financial advice and accounting.” 

Findex was advised by Chase Corporate Advisory, King & Wood Mallesons and Deloitte on the acquisition, and its part owned by investment firm KKR, the local division of US private equity firm Kohlberg Kravis Roberts.

Crowe Horwath, formally known as WHK Horwath, is Western Australia’s eighth biggest accounting firm, with 95 accountants operating in the state according to Business News IQ data.

Findex said it has a business portfolio valued at about $US8 billion, prior to the acquisition.

Crowe Horwath shares were 24.7 per cent higher at 48 cents per share at 10:45am. 

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