NZX to acquire large KiwiSaver provider

The NZX [NZX] is to acquire KiwiSaver provider SuperLife, which has $1.27 billion of funds under management and 41,000 members.

Its buying the superannuation and passive funds manager as part of its plan to grow its passive funds management and administration business.

The business is to be bought from Aventine Group for an initial payment of $20 million funded through $10 million of bank debt and $10 million of NZX shares to the vendors. Further payments of up to $15 million, if targets are achieved, will be $5 million of NZX shares and up to $10 million in cash.

SuperLife’s passive approach and large customer base made a good strategic fit with NZX’s existing Smartshares business, NZX said in a statement.

Combined, the NZX funds management business will become the country’s biggest passive funds manager and exchange traded funds provider, and will be managed separately from its capital markets business, NZX says.

SuperLife’s directors, Michael Chamberlain and Owen Nash, will continue as directors of SuperLife, and Mr Chamberlain will join NZX’s management team. A search for a chief executive of the new combined business is underway.

NZX CEO Tim Bennett says through a statement the SuperLife acquisition was the catalyst for Smartshares to further develop the ETF market in New Zealand, with new domestic and international debt and equity ETF products to be launched in the next 12 months.

“We expect that the creation of a vibrant exchange traded funds business in New Zealand will ultimately increase liquidity and interest in the market, and provide greater choice and cost effective diversification for investors,” Mr Bennett said.

“We believe it would be extremely difficult to unlock the strategic benefits of growing the ETF market in New Zealand in a timely and cost effective manner without acquiring or merging with a passive manager such as SuperLife.”

There will be no changes to the services provided to either of the business’s customers, and no change in investment approaches, NZX says.

NZX expects the transaction will add to earnings per share over the 2015 financial year, and will be complete mid-January.

Superlife has an almost 20% stake in loss-making energy efficient lightbulb marketer Energy Mad.

The NZX also updated the market on its employment litigation with the Clear grain exchange developer Ralec. A trial date is not expected before the end of next year and it expects to pursue interlocutory matters. NZX also said it is talking with Inland Revenue Department about proposed adjustments to historic matters that may have a tax impact of about $1.3 million, although the outcome is not certain.