NobleOak Life (ASX: NOL) has acquired the trailing commissions and FiftyUp Club platform business from RevTech Media Pty Ltd, in a deal valued at $11 million. The acquisition strengthens NobleOak’s position in the Australian life insurance market by granting the Company access to a significant member base and eliminating ongoing commission payments.
RevTech, a media and technology company based in Sydney, specialises in distributing discounted products in sectors such as insurance, telecommunications, and utilities. Its consumer platforms, including the FiftyUp Club, cater to more than one million Australian members. FiftyUp Club, specifically targeting individuals aged 50 and above, boasts a community of 480,000 members, providing them with access to discounted insurance and financial services products.
Under the terms of the acquisition, NobleOak will pay $3 million in cash, with the remaining $8 million settled in NobleOak shares. The share component is calculated at $1.556 per share, based on the volume-weighted average price (VWAP) over the 25 days preceding the sale agreement.
NobleOak has been distributing its life insurance products through RevTech’s platforms since 2013 and directly to consumers through its digital platform and provides tailored insurance solutions through financial advisers.
“We are very pleased to announce our agreement to acquire the trailing commissions and ‘FiftyUp Club’ business from RevTech Group,” said NobleOak CEO, Anthony Brown.
“The Acquisition will be value accretive, delivering annual free cash flow, as well as continued access to the 480,000 members of the ‘FiftyUp Club without any ongoing commissions. It is in line with our risk appetite and diversified growth strategy.”
The acquisition positions NobleOak to benefit from an established customer base, primarily composed of seniors who are increasingly seeking affordable life insurance products. NobleOak’s strategic focus on delivering high-value, easy-to-understand insurance policies aligns well with the mission of the FiftyUp Club, which is to offer exclusive deals to older Australians.
As part of the transaction, NobleOak will acquire 100% of the shares in RevTech Media, which will only contain the assets related to the trailing commissions and FiftyUp Club business. NobleOak has also secured an option to transfer RevTech Media back to a member of the RevTech Group once the necessary assets have been extracted.
The deal is subject to customary conditions, including the restructuring of RevTech to facilitate the acquisition. Upon completion, NobleOak will gain full access to FiftyUp Club’s membership base and associated assets, while phasing out the trailing commission structure that had previously been in place for the distribution of its products.
For FY24, NobleOak reported strong financial growth despite broader cost-of-living pressures seeing a pullback on other premium insurance products. NobleOak’s
in-force premiums rose 22% to $387 million, exceeding the company’s guidance of 15-20% growth. The Company’s direct channel saw a 14% growth in gross in-force premiums, reaching $91.6 million, supported by effective digital marketing and partnerships with brands such as Budget Direct and Costco.
NobleOak’s underlying net profit after tax surged 48% to $5.9 million, benefiting from a strong underwriting performance and improved insurance margins. Statutory NPAT, however, declined 31% to $9.3 million due to one-off costs.
The Company continues to invest in technology and customer experience, with plans to drive long-term growth through new strategic initiatives, including digital transformation and embedded insurance offerings.
Mitch Korver is a Business Writer focused on high-growth companies listed on the ASX in the small and medium cap space.
Latest posts by Mitchell Korver (see all)
- Harris Technology continues growth with refurbished tech sales surpassing second $1M in just three months - October 28, 2024
- Income Asset Management flags positive cashflow via strategic platform partnership with Perpetual - October 7, 2024
- NobleOak acquires RevTech and FiftyUp Club in $11 million deal that ceases life insurance commission payments - October 2, 2024
Leave a Comment
You must be logged in to post a comment.