MA Financial snaps up IP Generation
MA Financial Group is buying Chris Lock’s seven year old asset management business IP Generation.
In the surprise deal, worth $90.4 million, the value of the buyer’s assets under management rises $2 billion to over $12b.
Mr Lock formed IPG after splitting from the Liberman family’s Impact Investment Group and banking the $33.1m proceeds of a Footscray asset, the ex-Lonely Planet HQ, which IIG managed after buying from Trilogy for $13.5m three years earlier.
After a four year period of acquisitions (including for Craigieburn Central, pictured, top), IPG now manages 10 funds holding 14 shopping centres – in each east coast state and Western Australia – on behalf of high net worth investors.
“IP Generation has an impressive track-record in securing assets, raising capital and delivering strong returns to its investors,” MA Financial joint chief executive officer, Julian Biggins, said.
“Its complementary, high growth real estate funds management platform will give our real estate Asset Management business immediate additional scale, expanded and diversified distribution channels and an increased Melbourne presence and investor base,” he added
“IPG’s 29 real estate investment professionals will join MA Financial’s real estate Asset Management business creating a broad real estate funds management platform managing c$8b in core, alternative and real estate credit assets,” according to the executive.
“Founder and CEO Chris Lock will assume the role of Head of Core Real Estate at MA Financial and be responsible for the performance of the Core Real Estate business and its funds…supported by long-time IPG COO Ingrid van Dijken.
“IPG Chairman David Blight and Director Greg Miles will join MA Financial’s real estate Asset Management team in leadership roles
“The $90.4m purchase price represents a multiple of 7.9x FY24 normalised EBITDA.
“The acquisition consideration includes an $80m upfront component payable 100 per cent in MAF shares which will be issued subject to vesting conditions, and $10.4m in deferred consideration payable 50pc in cash and 50pc in MAF shares in 12 months’ time.
“The combination of IPG and MA Financial delivers significant synergies and scale benefits and is expected to be accretive to MA Financial’s FY25 underlying earnings per share on a full year pro forma basis.
“The integration of our teams will deliver significant synergies and scale benefits, deepening our real estate platform to ~250 professionals offering a breadth of expertise across origination, investment management, development and property management capabilities.
“This acquisition will mutually benefit our many investor clients, which aligns with our philosophy of achieving win-win outcomes for clients, shareholders, and staff.”
Mr Lock added “we have known the MA Financial team for many years and believe the scale of the combined business enables us to deliver even better opportunities and investment returns to all our clients in the future”.
Mr Biggins said “the transaction presents…capital-raising capabilities to fast-track growth”.
“Additionally, there is potential for earnings enhancement and platform synergies to be realised on the operating side, including within MA Financial’s shopping centre management business, RetPro,” according to the executive.
Settlement is scheduled in the second half of the year.
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