Gallagher Bassett will pay $7 million upfront for Symetri's operating business and most of its assets, with earn-outs capped at $18 million based on profit through to December 2018.
Australian insurance claims management company Stream Group has sold its New Zealand subsidiary Symetri to multinational claims manager Gallagher Bassett for up to $25 million.
Gallagher Bassett will pay $7 million upfront for Symetri's operating business and most of its assets, with earn-outs capped at $18 million based on profit through to December 2018. Insurance services firm Stream will keep its subsidiary Symetri Technology and through that, the intellectual property used in the Symetri claims management business, and will license that IP to Gallagher Bassett.
ASX-listed Stream entered voluntary administration in December 2015 after issues with its key client, insurer RACQ, and was put into liquidation in April 2016, selling its UK subsidiary at that time. The New Zealand subsidiary was its largest and most profitable division, having always operated independently, meaning the group was cash flow positive once it exited its UK and Australian businesses.
Last July, Stream said it planned to raise up to $A1 million through the sale of convertible notes to existing shareholders and expected to lodge first-half earnings the following month. Instead, it was suspended from official quotation on the ASX in August 2016 after failing to pay its annual listing fees, and no earnings have been filed on the ASX. The shares last traded at 7.8Ac.
After the completion of the acquisition, Stream's assets will consist almost exclusively of its ownership of Symetri Technology's BuildAssist and Qusol software, and the cash from the sale of assets to Gallagher Bassett, it said. For the year to June 30, 2016, Stream had $A453,000 in cash and equivalents, which would be boosted to $A6.7 million on a pro-forma basis after the sale. Total assets would rise to $A12.1 million from $A8.3 million on that same basis, while liabilities would drop to $A3.9 million from $A4.6 million.
"After completion, Stream's business operations will be the investment of cash and the business carried on by Symetri Technology, being the licensing and further development of the IP," Stream said in a statement to the ASX. "As a consequence, Stream's principal business will be developing and providing the BuildAssist and Qusol software platforms. All material liabilities will be repaid, and the only liabilities will be trade creditors."
Stream's directors said they "intend to seek other opportunities for the investment of Stream's assets." The sale will require shareholder approval and will be voted on at a general meeting on March 1, with the agreement expected to be completed within a week after that.
(BusinessDesk)
