ARC Funds Limited (ASX:ARC) Secures Call Option for TTDS
Strategic Acquisition
ARC Funds Limited (ASX:ARC) has successfully obtained a call option to acquire a 63.49% interest in The Term Deposit Shop Pty Ltd (TTDS). This option allows ARC to purchase the stake from founder Mr Grant Goodier, enhancing its position in the cash management sector.
TTDS operates an online cash management platform that enables clients to maximise returns from term deposits and high-interest savings accounts. With over $550 million in funds under management, TTDS primarily serves financial planners and clients looking for competitive banking options across multiple institutions.
Operational Benefits
The acquisition aligns with ARC’s goal to broaden its investment offerings. TTDS’s platform streamlines investment transactions, providing essential information on interest rates and terms. Clients benefit from a user-friendly interface that simplifies the process of switching between banks to secure the best rates.
The total market for term deposits in Australia is approximately $1 trillion, indicating significant growth potential for TTDS. If exercised, the call option will complement ARC’s existing investment portfolio and provide access to a wider range of potential investors.
Next Steps
The call option can be exercised before 5 PM Sydney time on February 28, 2024. The total purchase price upon execution will be approximately $2.38 million. ARC is expected to conduct confirmatory due diligence and will keep shareholders informed about the acquisition’s progress, in accordance with disclosure obligations.
Motley Fool contributor Aaron Shaw has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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