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Investor media group Equity Story Group (ASX: EQS) is betting more than its own market capitalisation to acquire Adelaide-based financial advisory firm Baker Young for $4.2 million, less than two months after attracting strategic investment from Capital Haus whose founder Brendan Gow is now its executive chairman.
The acquisition sum is just shy of the $4.5 million in annual revenue recorded in FY24 by Baker Young, which has approximately $700 million in funds under management (FUM) and more than 6,000 client accounts.
The cash deal will be fully funded by debt as well as the issue of 10 million EQS options valued at 5 cents each, which is almost three times the value of EQS shares currently.
Equity Story will pay $3 million upfront for the transaction - a level equivalent to its current market capitalisation - with the remaining $1.2 million subject to performance conditions 10 months after the deal is completed.
The ASX-listed company says the transaction is expected to include a profit-share model for Baker Young advisers and staff, serving as a foundation to attract more advisors as the Equity Story Group expands.
Equity Story CEO Shane White, who was promoted to the role in September, says executing a strategic acquisition like Baker Young "so early in his tenure as CEO" signals a new phase of growth, ambition and capability for the group.
"This opportunity expands our wealth advisory platform, strengthens our corporate advisory reach, and delivers national scale — all while remaining deeply aligned with our mission to improve investment outcomes for Australians," White says.
"I'm grateful for the efforts of our founder, David Tildesley, executive chairman Brendan Gow, and the broader EQS team in bringing this milestone to life."
"Importantly, this significant acquisition and outstanding service offering would not have been possible without the exceptional business that Alan Young and David Baker have built over the past four decades as Master Stockbrokers with an acute focus on client wealth. Exciting times ahead for the group."
Equity Story executive chairman Brendan Gow, whose company Capital Haus secured an 11.6 per cent stake in the group in February, describes Baker Young as an ideal strategic fit.
"This acquisition exemplifies our thesis of consolidating high-quality advisory practices under a forward-thinking brand," Gow says.
"As the advisory sector faces generational change and regulatory pressures, we see a clear opportunity to partner with legacy firms ready for scalable, tech-enabled growth.
"We look forward to integrating Baker Young's excellent team and service model into the EQS family."
Baker Young's co-founders and joint managing directors, Alan Young and David Baker, have committed to remaining with the business and group in key roles to ensure a seamless transition.
"We've spent four decades building Baker Young on a foundation of trust, personalised service, and consistent performance," the pair say in a joint statement.
"Joining Equity Story allows us to continue that tradition while expanding our reach, resources, and digital capabilities. We're energised by the vision Shane, Brendan and the EQS team are pursuing, and we're proud to be a part of it."
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