Credit union link-up in latest Tower purchase

By Phil Boeyen, ShareChat Business News Editor

Tuesday 5th September 2000

Listed insurer Tower is gunning for further growth in Australia via its purchase of Bridges, a leading Aussie master trust and financial planning group.

The insurer is shelling out A$168 million for the group, which is owned by the services company of the Australian Credit Union movement, known as CUSCAL.

Payment will be by way of A$20 million in Tower shares, and the rest by a mix of debt, surplus capital and a A$20 million insitututional placement.

Tower's MD, James Boonzaier says the purchase will provide a platform for future growth.

"Bridges is one of the top 10 discretionary master trust providers in Australia, with A$2.7 billion of funds under management."

"Bridges also has a distribution network of 110 well qualified financial planners, with estimated fund inflows of A$800 million per annum and a further A$2 billion of funds under advice."

Mr Boonzaier says his company has also signed a five year strategic alliance with CUSCAL, which will provide Tower with access to the more than 3.6 million members of the credit unions in Australia.

The deals will also provide economies of scale benefits, by increasing Tower's assets under management in Australia to more than A$11 billion, out of a total of A$17.5 billion.

The acquisition is expected to have a positive impact on earnings in less than 18 months.

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