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Prime Financial Group (ASX: PFG) has expanded its wealth offering through the acquisition of Lincoln Indicators, the Melbourne-based owner of Stock Doctor, in a deal that could be worth up to $17.9 million.
The acquisition will boost the financial advice and asset management group’s access to 3,300 high-net-worth investors who currently use Lincoln Indicators’ services, increasing its existing client base in this sector by 10 times.
Prime Financial has agreed to pay $15.75 million up front for Lincoln Indicators in a cash and scrip deal, with the total potentially rising to $17.9 million should the target secure prescribed earnings targets.
Lincoln Indicators co-founder and managing director Tim Lincoln, who established the business with his father Dr Merv Lincoln in 1991, will join Prime’s Wealth leadership team following completion of the acquisition.
Lincoln Indicators, which has about $600 million in funds under management, provides its clients with a range of research services and proprietary managed funds.
The company’s Stock Doctor product gives high-net-worth self-directed investors and self-managed super funds access to exclusive quantitative research that identifies both stocks with downside risk, while its Taking Stock product provides investors with weekly updates, expert opinions, stock insights and analysis tools.
Through Star Doctor, Lincoln identifies Star Stocks by using the company’s exclusive research methodology, which the company says gives investors the tools to create, manage and optimise their portfolios.
Lincoln Indicators’ three funds - the Lincoln Australian Income Fund, the Lincoln Australian Growth Fund and the Lincoln US Growth Fund - invest in a portfolio of stocks after applying Lincoln’s quantitative methodology of screening.
Simon Madder, Prime’s managing director and chairman, say the acquisition of Lincoln Indicators will expand the group’s Wealth offering – a sector of the business that delivered a 41 per cent in crease in revenue in the first half of FY25.
“The transaction provides us with additional tools and services for the high-net-worth and wholesale investor market and complements our existing Wealth business, providing us with significant distribution capabilities, multiple synergies and cross-sell opportunities, putting us in a strong position to capture the growing Australian wealth market,” says Madder.
“The acquisition will not only provide Prime ownership of a leading Australian wealth provider, but also provides us with additional profitability and a suite of well-established and loyal clients.
“We look forward to bringing our two businesses together with a respect for the legacy and client base that Lincoln Indicators’ co-founder and managing director, Tim Lincoln, and the team has built.
“Prime has a successful track record of working with founders and has a significant number as part of its leadership team. We warmly welcome the well-established and capable Lincoln Indicators team to Prime.”
Lincoln Indicators employs a team of 30 staff, but Prime has not indicated how many will transition across following the acquisition.
Prime Financial notes that the Lincoln Indicators acquisition will deliver operational, client and capability synergies and cross-sell opportunities into the wider group.
Lincoln Indicators is expected to make a small contribution to Prime Financial’s FY25 earnings results with an expected $10 million to $11 million of revenue annually, most of it recurring revenue, and a positive EBITDA contribution.
The transaction will also help Prime access the growing Wealth sector with around 690,000 individuals now classified as high-net-worth investors in Australia, representing an 8.7 per cent rise from 635,000 in 2023.
The company notes that, collectively, these investors manage $3.4 trillion in investable assets, which is up from $2.98 trillion in the previous year.
Prime Financial, which operates across four business pillars comprising Accounting & Business Advisory, Wealth Management, SMSF and Capital, reported a 25 per cent increase in revenue to $22.9 million in the first half of FY25.
The group reported EBITDA of $3.4 million, up 102 per cent compared to a year earlier, driven by a robust earnings performance from FY24 acquisitions and lower one-off costs compared to the previous year.
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