Ann: ASSET: NZX: NZX to acquire SuperLife to grow its Smartshares business

• Release Date: 08/12/14 08:31
• Summary: ASSET: NZX: NZX to acquire SuperLife to grow its Smartshares business
• Price Sensitive: No
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					NZX
08/12/2014 08:31
ASSET
PRICE SENSITIVE
REL: 0831 HRS NZX Limited

ASSET: NZX: NZX to acquire SuperLife to grow its Smartshares business

NZX is pleased to announce the acquisition of leading New Zealand
superannuation and passive funds manager SuperLife, positioning NZX strongly
in the growing retirement savings market and enabling the launch of new
financial products by NZX's Smartshares business.

With more than $1.27 billion of funds under management and 41,000 members,
SuperLife is one of New Zealand's largest specialist financial services
providers of superannuation, KiwiSaver and managed investments products.

NZX has for some time been exploring options to grow the scale of its passive
funds management business and funds administration capabilities, and
SuperLife's passive approach and customer base makes the business an
excellent strategic fit with NZX's existing Smartshares business.

Combined, the NZX funds management business will become the country's leading
passive funds manager and provider of Exchange Traded Funds (ETFs) and will
build on both businesses' investment approaches and proven track records.

NZX intends to manage the combined funds management business separately from
its capital markets business. A search for a CEO for the combined business is
now underway. As part of the acquisition, SuperLife's directors, Michael
Chamberlain and Owen Nash will continue on as directors of SuperLife, and Mr
Chamberlain will join NZX's management team.

NZX CEO Tim Bennett commented: "This acquisition is driven by our view that
there is a clear opportunity in the market for a low cost, passive funds
provider which has credibility and scale."

Pipeline of new ETFs
The SuperLife acquisition is the catalyst for Smartshares to further develop
the ETFs market in New Zealand.  Smartshares intends to launch a broad range
of domestic and international debt and equity ETFs in the next 12 months.

"We expect that the creation of a vibrant exchange traded funds business in
New Zealand will ultimately increase liquidity and interest in the market,
and provide greater choice and cost effective diversification for investors,"
Mr Bennett commented.

"We believe it would be extremely difficult to unlock the strategic benefits
of growing the ETF market in New Zealand in a timely and cost effective
manner without acquiring or merging with a passive manager such as
SuperLife."

"The combined SuperLife and Smartshares funds management business has strong
growth prospects given the expected growth in KiwiSaver funds under
management, and the increasing attractiveness to New Zealanders of low cost
passive funds."

"From an investment perspective, SuperLife has at its core a strong, passive
approach and is one of the few New Zealand managers to embrace this. We
expect a significant shift towards passive investment in the years ahead
which is already evident in Australia and other international markets."

"I look forward to welcoming Michael Chamberlain and Owen Nash and their
team, who have built a terrific business over the past 15 years, to the NZX
team and to working together to take the combined businesses to the next
level."

For SuperLife and Smartshares customers it will remain business as usual.
There will be no changes to the services provided, to the customer services
staff, and most importantly, there will be no changes to the guiding
principles or investment approaches.
SuperLife Director and Founder Michael Chamberlain commented: "This is a
great opportunity for the SuperLife team to join with the NZX team, to
enhance our current service offerings to members and to enable us to continue
to be a leader and innovator in the New Zealand funds management,
superannuation and KiwiSaver industry."
Purchase consideration
The purchase consideration will be an initial payment of $20 million funded
through $10 million of bank debt and issuance of $10 million of NZX shares to
the vendors which are subject to disposal restrictions. Further payments of
up to $15 million are based on retention and growth of the funds under
management over a three year period. These further payments, if targets are
achieved, will be $5 million of NZX shares and up to $10 million in cash.
NZX expects the completion date for the SuperLife transaction, which is
conditional on normal pre-closing matters, to be mid-January 2015. NZX
expects the transaction will be earnings and EPS accretive over the 2015
financial year.

NZX will provide a full update on the acquisition and future growth plans at
NZX's full year results announcement in February 2015
Other information
In the context of the issues of shares pursuant to the SuperLife transaction,
NZX wishes to provide the following update on the current status of the
following contingent liability items in NZX's last published financial
statements:

Ralec Litigation - Litigation with the Ralec parties remains ongoing with no
substantive change to status. A trial date is not expected before the end of
2015.  Prior to trial, NZX expects to be pursuing or subject to a number of
interlocutory matters.

Tax - Communications continue with the IRD in respect of Notices Of Proposed
Adjustments relating to historical items for which NZX has estimated that the
tax effect may be up to approximately $1.3 million. The outcome as to timing
of resolution, liability and quantum remain uncertain. However, NZX may take
a provision in the financial statements relating to the current financial
year for an amount yet to be determined.

For further information, please contact:
Media
Kate McLaughlin
Corporate Communications
DDI: + 64 9 309 3654
M: +64 27 533 4529
E: [email protected]

Investors
Bevan Miller
Chief Financial Officer
DDI  +64 4 498 2271
Mobile +64 21 276 7359
E: [email protected]

Fact Sheet

Smartshares & SuperLife

- The combined business will have more than $1.6 billion in funds under
management (FuM) and provide service to more than 50,000 customers
- Combined KiwiSaver FuM will exceed $400 million representing 25% of total
FuM
- In the year ended 30 November 2014, SuperLife's FuM grew by 13.1% while
Smartshares' FuM grew by 12.6% over the same period

Smartshares

- Smartshares is a wholly owned subsidiary of NZX Limited (NZX). Smartshares
is the pioneer of Exchange Traded Funds (ETFs) in New Zealand, launching the
first ETF, TENZ - the NZSX 10 Fund, in 1996
- Smartshares is New Zealand's only issuer of ETFs, with in excess of 9,000
unit holders and more than $400 million FuM, as at 30 November 2014
- Smartshares ETFs are listed funds designed to "track" a sharemarket index
or a group of pre-defined shares in a sector that are regularly rebalanced.
Each Smartshares ETF is:
- Comprised of the securities of the companies that make up the index it
tracks or the predefined group of shares in one sector, and
- Designed to provide investors with similar returns to a direct investment
in all the securities that make up the ETF
- Smartshares is also a provider of a KiwiSaver scheme, smartkiwi, which
invests in two of the Smartshares ETFs

SuperLife

- SuperLife is one of New Zealand's largest specialist financial services
providers of superannuation, KiwiSaver, and managed investments products
- SuperLife had $1.27 billion in FuM as at 30 November 2014 and its customers
include employers of all sizes and individuals
- SuperLife's superannuation and KiwiSaver schemes are administered as "one"
however members can choose to invest in a single scheme or across both
- SuperLife is a registered superannuation scheme manager (SuperLife AS/1068
& Ascot AS/1882) and KiwiSaver provider (KS 10022), and has operated in New
Zealand's superannuation industry for more than 15 years
- SuperLife adopts a low cost, passive investment approach
- Investments in SuperLife schemes let employees and individuals choose from
a range of investments ("funds") in major asset classes, from cash through to
emerging market shares and in several managed funds investing in a range of
asset classes to target risk return outcomes
- Pools are managed internally by SuperLife using the expertise of MCA NZ
Limited or externally by investment managers (depending on the fund chosen)
- SuperLife also offers access to a range of life, disability income and
medical insurance options
End CA:00258606 For:NZX    Type:ASSET      Time:2014-12-08 08:31:12