Sequoia announces acquisition of 2 firms

In an ASX listing on Tuesday, Sequoia said it has signed a heads of agreement to acquire and merge the businesses of Castle Corporate and Castle Legal.

The acquisition of the Castle businesses aligns with Sequoia Financial Group’s strategic vision of providing an “extensive range of services to accountants, financial advisers, AFSL holders and lawyers”.

“Our service offerings deliver solutions to those who appreciate the value and timeliness of products, services, and advice acquired through scale and technology platforms,” the firm said.

It described the Castle businesses as “prominent and reputable firms” specialising in providing accountants, financial advisers, and lawyers comprehensive advice and solutions relating to new and existing companies, trusts and self-managed super funds.

With an appealing PE multiple, Sequoia said the acquisition is anticipated to provide a significant $800,000 annual boost to the EBITDA of its professional services division.

Sequoia Financial Group’s chief executive officer, Garry Crole, expressed enthusiasm about the acquisition, stating “We are delighted to have the Castle team join us and look forward to combining our expertise with that of Castle to drive innovation, augment the services on offer, and accelerate our growth in this area of our market.”

According to Sequoia, the disclosed purchase consideration for the Castle businesses amounts to a maximum of $3.15 million, to be paid in cash and shares over two years following the completion of the transaction.

The final tranche is subject to a performance hurdle payable in July 2025, with the purchase said to be funded from Sequoia’s “strong cash reserves” and be immediately earnings accretive.

Established in 1992, Castle Corporate has a significant hold among accounting and legal professionals throughout Victoria.

Founder Jenny Hamley will be joining Sequoia, along with all of Castle’s employees, as part of the professional services division.

Commenting on the acquisition, Ms Hamley said: “Everyone at Castle is excited to be joining forces with Sequoia. We are very much looking forward to this complementary pairing of two dynamic players in the market, both of whom are mindful of the need to constantly and consistently deliver value to clients”.

The targeted completion date for this transaction is set for 31 July.