NobleOak Acquires RevTech's 'FiftyUp Club' and Trailing Commissions
NOL (NOL) Share Update September 2024 Monday 30th
NobleOak to Acquire RevTech's 'FiftyUp Club' and Trailing Commissions
NobleOak Life Limited (ASX: NOL) has announced a strategic acquisition of RevTech Media Pty Ltd's trailing commissions and 'FiftyUp Club' business, aiming to enhance its growth and cash flow.
Instant Summary:
- NobleOak to acquire trailing commissions and 'FiftyUp Club' business from RevTech Group.
- Total acquisition cost of $11 million, including $3 million in cash and $8 million in NobleOak shares.
- The acquisition will be ROE accretive and provide access to 480,000 'FiftyUp Club' members.
Acquisition Details
NobleOak Life Limited (ASX: NOL) has signed a conditional Sale Agreement with RevTech Media Pty Ltd to purchase the trailing commissions on NobleOak products and its 'FiftyUp Club' platform business and brand. This acquisition is valued at $11 million, consisting of $3 million in cash and $8 million in NobleOak shares, calculated at a price of $1.556 per share based on the volume-weighted average price (VWAP) from the 25 days before the Sale Agreement was signed.
The acquisition is expected to be value accretive for NobleOak, exceeding investment hurdles and generating free annual cash flow over an extended period. The deal also grants NobleOak access to 480,000 members of the 'FiftyUp Club' without ongoing commissions.
Strategic Benefits
The acquisition aligns with NobleOak's growth strategy and risk appetite. By acquiring RevTech's trailing commissions and 'FiftyUp Club' business, NobleOak aims to enhance its cash flow and expand its customer base. The 'FiftyUp Club' targets Australian customers aged 50 and above, a demographic that aligns well with NobleOak's life insurance products.
Completion of the acquisition is subject to several conditions, including the restructure of RevTech to facilitate NobleOak’s acquisition of the FiftyUp Club. The acquisition is structured as the purchase of 100% of the shares in RevTech Media Pty Ltd, which contains only the assets that NobleOak is purchasing.
Company Statements
NobleOak's CEO, Anthony Brown, expressed enthusiasm about the acquisition, stating, 'We are very pleased to announce our agreement to acquire the trailing commissions and 'FiftyUp Club' business from RevTech Group. The acquisition will be value accretive, delivering annual free cash flow, as well as continued access to the 480,000 members of the ‘FiftyUp Club without any ongoing commissions. It is in line with our risk appetite and diversified growth strategy.'
The acquisition is expected to positively impact NobleOak's stock by enhancing its cash flow and expanding its customer base. The deal aligns with NobleOak's growth strategy and risk appetite, making it a strategic move to strengthen its market position. The access to 480,000 'FiftyUp Club' members without ongoing commissions is a significant advantage, likely to boost investor confidence.
Investor Reaction:
Analysts are likely to view the acquisition favorably due to its potential to enhance NobleOak's cash flow and customer base. The strategic alignment with NobleOak's growth strategy and the accretive nature of the deal are expected to be well-received by investors. However, the completion of the acquisition is subject to several conditions, which may introduce some uncertainty in the short term.
Conclusion:
Investors should keep an eye on the completion of the acquisition and assess its long-term impact on NobleOak's financial performance. The strategic acquisition of RevTech's trailing commissions and 'FiftyUp Club' business is expected to enhance NobleOak's growth and cash flow, making it a potentially valuable addition to investor portfolios.