Chant West Holdings, the listed company for the Chant West investment research firm, has reached an agreement to sell ‘Enzumo’, a software business which gave Chant West access to the listed market. The buyer is financial planning dealer group Centrepoint Alliance. The price appears healthy in the current climate.
Centrepoint Alliance is a leading provider of advice and business services to financial planning firms nationally. It offers a range of governance, business management, client growth and advice services. The agreed price for the purchase, expected to be completed this month, subject to usual conditions, is $1.5 million.
According to Brendan Burwood, the Chant West chief executive, there has been interest in the Enzumo business for some time and he and the board had hoped to distil that interest after the sale of the main research business, as announced, to Zenith Investment Partners. However, with that transaction delayed, the board had decided to bring forward the sale of Enzumo.
Burwood said: “We have considered the interest shown by a number of parties and believe that Centrepoint Alliance’s offer provides the best value for shareholders. Enzumo and its sibling have made excellent progress over the recent period and are well positioned to continue that performance… We believe this transaction represents the best outcome for all stakeholders.”
He’s right. It’s probably a good deal for both seller and buyer. Counterpoint is better able to leverage the Enzumo services than Chant West Holdings, dominated by the original Chant West research business, could have. Enzumo does analysis of financial planning businesses and creates technology solutions to help them operate more efficiently. Its services typically involve customising XPLAN software to meet a firm’s business needs.
The bigger picture, though, for Chant West Holdings, is what becomes of its deal with Zenith Investment Partners, announced in February. Burwood said in the ASX release last week that the company would issue a separate update on that later this month. Chant West and Zenith had agreed on a $12 million price for the Chant West research business. That also seemed like a good deal for both parties. But Zenith, controlled by private equity firm Five V Capital, subsequently said it would withdraw from the deal due to the financial crisis surrounding COVID-19. Chant West has now issued legal proceedings, in the NSW Supreme Court, against Zenith to enforce the agreement.