NAB agrees to sell MLC Wealth to IOOF

Maria Nikolova

The transaction, valued at $1,440 million, MLC’s advice, platforms, superannuation & investments and asset management businesses.

NAB has today entered into an agreement to sell 100% of MLC Wealth to IOOF Holdings Ltd. for a purchase price of $1,440 million.

The agreement follows the strategic decision announced by NAB in 2018 to pursue an exit of MLC and is in line with NAB’s strategy to simplify and focus on its core banking business, while creating a stronger future for MLC.

The purchase price of $1,440 million represents a multiple of 17.3x MLC’s cash earnings of approximately $83 million1 and comprises:

  • $1,240 million in cash proceeds from IOOF
  • $200 million in the form of a 5-year structured subordinated note in IOOF, that will provide NAB with the opportunity to participate in the potential value created through the combination of MLC and IOOF over the medium term

In addition, NAB is expected to receive approximately $220 million of surplus cash from MLC in the form of a pre-completion dividend.

The transaction is estimated to result in a post-tax loss on sale of approximately $400 million, which includes estimated post-tax separation and transaction costs for NAB of approximately $200 million.

The transaction includes MLC’s advice, platforms, superannuation & investments and asset management businesses. NAB will retain legal ownership of MLC’s advice entities, for the purpose of completing advice-related remediation programs.

Other assets of the advice entities and related employees of the advice business will be transferred to IOOF as part of the transaction. MLC’s aligned advisers will be provided with an opportunity to transfer to IOOF’s licenses at completion of the transaction.

NAB will provide protection to IOOF for certain pre-completion conduct matters via a combination of provisions, warranties and indemnities.

NAB will continue to offer targeted wealth management products and services through JBWere and nabtrade. NAB and IOOF will also enter into a strategic partnership that will cover a range of products and services. This will include a referral agreement through which NAB customers will have access to financial advice.

Completion of the transaction is subject to certain conditions, including regulatory approvals from APRA and ACCC. Subject to the timing of regulatory approvals, the deal is poised for completion before the middle of calendar year 2021.

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