OFM acquires fund manager for $42m
Author: Paddy Manning, Acquisitions
Date: 12/07/2006
Publication: The Australian
Section: Property

FAST-GROWING property syndicator Century Funds Management has been sold to the listed OFM Investment Group, a former mutual society, for $42.4 million in cash and shares.
Century's name and staff will be retained in the straightforward, bolt-on acquisition, with founder and managing director John McBain joining OFM's board of directors.
OFM chief executive Chris Martin yesterday indicated the company would seek to acquire other boutique fund managers.
OFM has about $1 billion in funds under management, selling financial products suited to retirees, including reverse mortgages, commercial mortgages, bonds and insurance. It also has a property business with about $100 million in mainly Victorian assets, including some in its $70 million OFM Direct Property Trust.
OFM paid $26.8 million in cash and $15.6 million in shares for Century, which manages over $440 million in property assets. The price is equivalent to 10.3 times its forecast earnings for 2006-07.
Century's principal shareholders Mr McBain and Jason Huljich will exchange their 90 per cent equity in the unlisted company for a 9.9 per cent stake in the the listed OFM, with a three-year escrow period. Mr McBain said yesterday Century's operation would remain "absolutely the same" and would take over the existing OFM property business.
"We very much wanted any merger we did to be with people of a similar size to us. We've turned down a lot of proposals (from companies) a lot bigger than us."
Century recently said it would launch wholesale products. Mr McBain said OFM's balance sheet gave it access to more - and bigger - property deals. OFM shares rose 14c to $2.40 yesterday.

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