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8 May 2024

ASX Announcement: Perpetual concludes Strategic Review

Investor Presentation - Strategic Review: Perpetual concludes Strategic Review

Webcast: Perpetual concludes Strategic Review

6 December 2023

ASX Announcement: Perpetual announces a strategic review of its Corporate Trust and Wealth Management businesses.

Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates, “KKR”) has entered into an agreement with Perpetual to acquire 100% of the Wealth Management and Corporate Trust businesses from Perpetual via a Scheme of Arrangement for total cash consideration of A$2.175 billion (“Scheme”).

Perpetual is to become a standalone, global multi-boutique Asset Management business with scale, diversified investment strategies, and supported by a leaner and more streamlined structure, with a strong balance sheet.

Amongst other conditions, the Scheme is subject to a Perpetual shareholder vote (which is intended to occur in January 2025) and, if implemented, Perpetual shareholders will receive cash proceeds and retain a shareholding in the Asset Management business which will become a standalone listed entity. Cash proceeds will be determined post repayment of outstanding Perpetual Group debt¹ as well as separation and transaction costs and other adjustments. Shareholders will retain their current ownership in a more streamlined and debt-free global Asset Management business that has scale and diversification across its over $200 billion in assets under management. 

Perpetual’s Board unanimously recommends shareholders vote in favour of the Scheme, subject to there being no superior proposal and an Independent Expert concluding that the Scheme is in the best interests of Perpetual shareholders.

Completion is anticipated to occur in February 2025, subject to satisfaction of conditions precedent and customary approvals including regulatory, court and shareholder approval.

^{1) Gross debt was approximately $771 million as at 30 April 2024.}

Perpetual shareholders will have the opportunity to vote on the transaction at a scheme meeting, which is anticipated at this stage to be held in January 2025. If the transaction is implemented, shareholders are expected to receive a cash return from the net proceeds, post repayment of outstanding Perpetual Group debt¹ as well as separation and transaction costs and other adjustments. Shareholders will also retain their current ownership in a more streamlined and debt-free global Asset Management business which will be a standalone ASX listed company with scale, diversification and a strong balance sheet.

^{1) Gross debt was approximately $771 million as at 30 April 2024.}

The $2.175 billion acquisition price represents an attractive valuation of 13.7x Last Twelve Month (LTM) EBITDA and a 16.3x LTM EBIT (as at December 2023) which will realise significant value for Perpetual’s shareholders.

From the sale of the Corporate Trust and Wealth Management businesses, shareholders will receive a cash return from the net proceeds, post repayment of outstanding Perpetual Group debt¹ as well as separation and transaction costs and other adjustments. Perpetual will provide details regarding the estimated cash proceeds as part of our FY24 results in August.

Shareholders will also retain their current ownership in a more streamlined and debt-free global Asset Management business which will be a standalone ASX listed company with scale, diversification and a strong balance sheet.

^{1) Gross debt was approximately $771 million as at 30 April 2024.}

Perpetual will provide an estimate of the cash proceeds shareholders can expect to receive from the transaction at the time of our FY24 results in August.

Following this, a Scheme Booklet (which will include an Independent Expert’s Report) summarising the key aspects of the transaction will be sent to shareholders towards the end of the calendar year.

A Scheme Meeting is being targeted for January. The Scheme Meeting will allow Perpetual shareholders to vote on the transaction.

The Board of Perpetual unanimously recommend that Perpetual shareholders vote in favour of the Scheme of Arrangement subject to there being no superior proposal and the Independent Expert concluding that the Scheme is in the best interests of Perpetual shareholders. We expect the transaction to complete in February 2025, subject to satisfaction of conditions precedents and customary regulatory, court and shareholder approvals.