AMR International supports Asset International, Inc. in the acquisition of PFL
Company: Plan For Life (PFL)
Client: Asset International, Inc.
Deal Size: Undisclosed
Issue
Asset International, Inc. is a US-based B2B financial services information company targeting brokers, asset managers and financial advisors. It wanted to expand into the Asia-Pacific region and to make its current offerings more global by adding the leading provider of fund information in Australia, Plan For Life (PFL), to its portfolio. However, Asset International was unsure of the size of the potential market and the role that fund data played in it. They also needed to understand the extent to which regulation and other factors drove its use and the competitive environment for this type of information.
AMR was tasked with confirming PFL's leading position and sustainability, as well as examining the possibility of using the potential acquisition as a platform to sell Asset International's products into the regional market. AMR was also asked to evaluate the likely impact of the founder of PFL's eventual departure, in particular on customer relationships and its sales process, where he served a key role.
Approach
AMR conducted interviews with key customers, industry experts, analysts and management, confirming the critical role PFL played in setting industry benchmarks for funds, marketing strategy, evaluating agents and brokers, and other key customer functions. We mapped the market to show how the target's data compared to those of competitors and analysed the underlying political situation that had encouraged the expansion of the pension funds and annuities market in Australia via tax and other incentives. AMR also spoke to industry experts, non-customers and competitors to learn about competitive threats, barriers to entry and the position of the target and its founder in the industry.
Result
AMR confirmed that PFL had a unique position of collecting data from nearly all fund and annuity firms in Australia, and then selling aggregated benchmark data back to them. This reciprocal relationship with the industry had developed into a “virtuous circle” making it extremely unlikely that any individual customer would either stop providing data or buying aggregated data back from.
AMR ascertained that PFL was the leading provider of data of its kind, in a growing market, with a deeply entrenched position and significant barriers to entry.
Because PFL was first to market with a unique product and had achieved near-industry-wide penetration, it was very unlikely that a competitor could win enough customers away in order to be able to offer a credible alternative "industry benchmark" data offering. AMR also ascertained that, although the founder of the company played an important role in maintaining customer relationships and in making new sales, it would be possible to successfully transition this role to other members of staff over time.
On the other hand, AMR found that local dynamics, competition and needs were quite distinct within the Asia-Pacific region, and that it would be likely to be difficult to leverage PFL as a platform to enter markets outside Australia. Nevertheless, AMR's findings validated enough of Asset International's rationale for investment to justify moving forward with the acquisition.
Outcome
Asset International acquired PFL in 2011. Commenting on the acquisition, Jim Casella, CEO of Asset International, said "Plan for Life allows us to expand our services as a primary resource of business intelligence for asset managers and asset owners worldwide." Jason Cassidy SVP, Strategy & Development, added, “The AMR International team, as always, was great on the Plan for Life project. Thanks so much.”