Sovereign buys Reeves Moses
Monday, April 27th 1998, 12:00AM
Sovereign has further expanded its moves into the financial planning area with the announcement today that it is buying Reeves Moses for nearly $4 million.Reeves Moses, which manages about $300 million, is the oldest established financial planning firm in New Zealand having been in business for more than 25 years. It is a franchised operation with eight offices in the North Island, plus it has been active in the funds management and product development area.
Among its offerings are contributory mortgages, property syndication and merchant banking activities.
Sovereign says it will pay up to $3.95 million for Reeves Moses including a portion to be paid subject to performance of the business over the next three years.
Reeves Moses is owned jointly by Roger Moses and Gary Stevens.
Sovereign says the sale contract is still being finalised and conditions will include obtaining lenders' and lessors' consents, and the continued employment of Moses and Stevens.
Sovereign joint managing director Ian Hendry says the acquisition is a strategic investment in the financial planning market which is consistent with the company's aim of being an integrated financial services provider.
"While the company will continue to be run as a separate operation we see considerable scope for us to expand our involvement in the financial planning market and enhance our product development for this sector," he says.
Reeves Moses will continue to make recommendations independent of Sovereign.
Hendry also hinted that Sovereign may look to buy other financial planning firms.
Moses says a number of companies had wanted to buy the business over the years.
The decision to sell was based on a number of reasons including the need to have access to capital for expansion, and a desire by the owners to realise some of their investment.
New Zealand firms have not been quick to move to corporate structures, such as this, however Moses beleives it will become more common as financial planning is becoming an increasingly capital intensive business.
Sovereign recently floated on the New Zealand Stock Exchange. Its prospectus said $5 million of the money raised would be used for buying a financial planning firm.
Besides Reeves Moses, Sovereign also owns Caledonian Financial Services, which operates predominantly in the risk market.
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