Chant West is shelving its legal proceedings against Zenith, as the latter comes back to the table on its planned acquisition, which will see Chant West chief executive Brendan Burwood exit the business.
The two companies completed a business sales agreement at 11:59pm last night and settled on court proceedings, the terms of which are confidential, Chant West said in ASX filings this morning.
Chant West's chief executive Brendan Burwood will not continue with Zenith.
Zenith Investment Partners chief executive David Wright said the acquisition adds a new business segment to Zenith's current business of managed accounts and of rating managed funds.
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"We see Chant West as a leader in its space and the acquisition presents a great opportunity for us to cross-sell across the two businesses' client base," Wright told Financial Standard, declining to disclose the final agreed sales price.
Chant West Holdings has 70 staff across offices in both Sydney and Melbourne.
"We don't have any pressure to cut costs, it's more about the cross-selling opportunity...Since Five V [which is a majority owner in Zenith], we have actually added to a chief operating officer, chief financial officer [and to] distribution, finance and IT teams," he said.
He said while the 2020 has been tough, the revenues for neither business have "fallen off the cliff".
"Whilst there has been a recent delay to completion, we have retained our high confidence in the Chant West team, in the client commitment of the business and in its dedication to improving and expanding its service delivery to clients. We share that dedication and look forward to building on the opportunities that our combined group can deliver to clients and staff," he said.
Zenith Investment Partners (through its 100% owned subsidiary CW Bidco Pty Limited in which private equity firm Five V Capital has a controlling stake) entered a business sale agreement for a price of $12 million to acquire Chant West's superannuation consultancy and research business on February 18.
However, it retracted its offer at March end, saying the business had been materially impacted since the two reached the agreement. In response, Chant West lodged legal proceedings against the Zenith subsidiary on April 6.
It has since sold its Enzumo financial planning software business to ASX-listed dealer group Centrepoint Alliance for $1.5 million.