Highlights
- ARC Funds (ARC) seeks full control of TTDS through a share-based proposal
- Deal aligns with ARC’s platform expansion strategy
- Move could enhance fund scale and distribution capabilities
ARC Funds Limited (ASX:ARC) has announced its plan to acquire the remaining 36.51% stake in The Term Deposit Shop Pty Ltd (TTDS), aiming to fully integrate the business into its broader growth strategy. The acquisition offer will be executed via a scrip deal, giving minority shareholders of TTDS 21.72 ARC shares for each TTDS share held. This exchange ratio is based on an ARC share valuation of 11.5 cents, aligning with the company’s recent capital placement on 12 May 2025.
Strategic Objective Behind the Acquisition
TTDS, a fast-growing financial services entity, has recorded an impressive compound annual growth rate (CAGR) of 42.8% over the past six years. ARC’s strategic vision includes capitalising on this growth by integrating TTDS’s distribution channels and client relationships. The move is intended to strengthen ARC’s multi-affiliate platform, potentially boosting its Funds Under Management (FUM), which already exceed $530 million.
Bringing TTDS completely under its umbrella would allow ARC to streamline its operations and execute marketing and distribution initiatives more effectively. These initiatives are likely to support the launch of additional income-oriented products, expanding ARC’s offerings in a competitive investment landscape.
Shareholder Approval in Focus
The issuance of new ARC shares to TTDS shareholders is contingent upon shareholder approval, which will be sought at an Extraordinary General Meeting scheduled for early August 2025. If the resolution passes, ARC will gain full ownership of TTDS, positioning itself to further solidify its presence among the emerging ASX300 players.
Leadership Perspective
According to ARC’s Managing Director, the move is a logical progression in the company’s evolution and could unlock meaningful value for all shareholders. TTDS has served as a foundational piece in ARC’s journey and is expected to contribute significantly to its broader income product distribution strategy.
For investors and market watchers interested in ASX dividend stocks, ARC’s evolving portfolio and income-oriented focus could be worth noting as the company positions itself within this space.