The Perpetual Ltd (ASX: PPT) share price is in focus after the company announced the sale of its Wealth Management business to Bain Capital for an upfront $500 million, plus potential further payments.
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What did Perpetual report?
- Binding deal to sell Wealth Management division to Bain Capital for $500 million cash up front
- Potential additional upfront payment, dependent on advice business performance to completion (up to $50 million)
- Earn-out component of up to $50 million, tied to Wealth business performance post-completion
- Net proceeds will be used to reduce company debt and invest in Asset Management and Corporate Trust businesses
- Pro-forma net debt to EBITDA expected to fall to around 0.2x after completion
What else do investors need to know?
Completion of the transaction is subject to approvals from the Foreign Investment Review Board (FIRB), the ACCC, and a corporate restructure to separate Wealth Management from the Perpetual Group. Completion is targeted towards the end of 2026.
Transaction and separation costs are expected to be around $30 million (post-tax) over the next 12–18 months. Estimated tax on proceeds is $45–50 million, with franking credits from this available for future dividends, likely from 2H27.
Perpetual will license its Wealth-related brands to Bain Capital for 15 years but will retain full ownership of the core "Perpetual" brand. Transitional support services for technology and operations will be provided to the Wealth Management business for up to 18 months post-completion.
What did Perpetual management say?
Perpetual CEO and Managing Director Bernard Reilly said:
Following a thorough sale process, we believe we have achieved the right outcome for our shareholders, clients and people, and one that reflects Wealth Management's longstanding reputation as a premium provider of high net worth advisory, fiduciary, philanthropic and not-for-profit offerings in the Australian market.
This is a pivotal step in our strategy to simplify and transform Perpetual. Following completion, Perpetual will have a stronger balance sheet and more simplified business, focused on two core businesses, asset management and corporate trustee services, while also enhancing its ability to invest for future growth and deliver improved shareholder returns over the longer term.
We believe we have found the right owner for the Wealth Management business to help it continue to grow and deliver high quality products and services to its clients. Today's announcement also provides clarity and certainty for our teams, who have continued to show an exceptionally high level of professionalism, commitment and focus throughout this process.
What's next for Perpetual?
With the Wealth Management sale, Perpetual will concentrate on its core Asset Management and Corporate Trust operations. The business expects to use sale proceeds to pay down debt and fund further growth in these divisions.
Over the coming months, the group will progress the required regulatory and court approvals for completion, and provide transitional support to the Wealth Management business until it is fully separated. The simplification aims to position Perpetual for long-term growth and improved shareholder returns.
Perpetual share price snapshot
Over the past 12 months, Perpetual shares declined 12%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 10% over the same period.
