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Highlights
- Divestment of Superannuation Business: Iress has entered into a binding agreement to sell its Superannuation business to Apex Group for an initial $40 million, with potential additional payments up to $20 million.
- Strategic Transformation: The decision follows a strategic review as part of Iress' transformation program, with the company concluding it was not the right owner for a regulated superannuation services provider.
- Transition Support: Iress will continue to assist Apex Group with the transition of the Superannuation business for up to 18 months after the deal closes.
Iress Ltd (ASX:IRE), a prominent ASX 200 tech stock, has gained 5% in early trading on Monday, with shares reaching $9.52. The surge comes after the financial technology company revealed it has entered into a binding agreement to divest its Superannuation business to global financial services provider Apex Group.
The decision follows a strategic review under Iress' transformation program. The company stated that while it recognized opportunities within its Wealth business to continue offering software to superannuation funds, it no longer saw itself as the ideal owner of a regulated superannuation services provider.
Transaction Details
Under the terms of the agreement, Iress will receive $40 million in cash consideration upon completion of the sale, with an additional $20 million in potential payments over the next 12 months, contingent upon meeting agreed-upon revenue milestones.
Completion of the transaction is expected in the second quarter of 2025. However, the deal is subject to several conditions, including approval from the Foreign Investment Review Board, novation of a key customer contract, and the customary warranties and indemnities.
Transition Period
Following the completion of the sale, Iress will continue to provide certain services to Apex Group for up to 18 months, ensuring a smooth transition of the Superannuation business to its new owner.
