Sequoia divests 80% of Morrison Securities

Sequoia has announced it has divested 80% of its equity in Morrison Securities to New Quantum Holdings, a provider of digital wealth management platform services for a total cash consideration of $40.5 million for the transaction.

The firm said in the announcement made to the Australian Securities Exchange (ASX), that on completion, which remains subject to customary conditions, an 80% equity interest will have a debt free balance sheet with net working capital of $10.5 million.

Sequoia said it will earmark $0.5 million of the purchase price for establishing a trust for all employees of Morrison Securities which will then hold shares in Sequoia and vest to employees over the next 18-month period.

“The [Sequoia] board believed the opportunity for Morrison to expand its service offering was restricted by the [Sequoia] balance sheet,” the firm said.

“This transaction will allow [Sequoia] to maintain a minority but viable interest in Morrison and provide the business with the capacity to capitalise on opportunities that both [Sequoia] and [New Quantum] have recognised as important for the future growth of Morrison.”

New Quantum has been selected due to its flexible approach to this transaction and its desire for Sequoia to maintain an active role in the development and growth of the business.

Sequoia also said that the divestment would have no impact on FY 2023 results however it will see Sequoia’s current consolidated group revenue reduce by approximately 20% in FY 2024.