Praemium Faces Earn Out Setback as OneVue Client Terminations Weigh on Funds Under Administration
Praemium Limited has announced that no earn out payment is due for the first period following its acquisition of the OneVue Platform Business, as funds under administration fell below the $3 billion threshold. Despite client terminations, the company remains confident in its earnings and synergy targets.
- No earn out payable for first 9-month period post-OneVue acquisition
- Funds under administration fell below $3 billion threshold due to client terminations and outflows
- Praemium revised service terms with some clients, leading to agreed terminations
- Company maintains commitment to mid-teens earnings accretion and $3 million synergies
- Second earn out period under review, contingent on future client retention
Background on the OneVue Acquisition
In April 2024, Praemium Limited completed its acquisition of the OneVue Platform Business (IOPB) from Iress Limited, a strategic move aimed at expanding its footprint in the investment platform sector. The deal included an earn out mechanism tied to the retention and growth of funds under administration (FUA) from OneVue clients, structured to be assessed at two nine-month intervals post-completion.
First Earn Out Period Results
On 12 February 2025, Praemium disclosed that for the first earn out period ending 15 January 2025, no earn out payment is due. This outcome stems from the FUA falling below the $3 billion threshold stipulated in the acquisition agreement. The shortfall was primarily driven by client terminations and outflows from existing OneVue clients since the acquisition date.
Praemium’s CEO, Anthony Wamsteker, explained that the company undertook a review of OneVue’s service offerings and pricing structures. In some cases, revised terms were proposed to ensure commercial sustainability. Where consensus could not be reached, terminations were mutually agreed upon, with transitions expected to conclude before the next earn out assessment in October 2025.
Financial and Strategic Implications
Despite the nil earn out for the first period, Praemium remains optimistic about the transaction’s long-term benefits. The company reaffirmed its commitment to achieving mid-teens earnings accretion and at least $3 million in synergies from the acquisition. Importantly, the agreed client terminations are not anticipated to materially impact underlying earnings forecasts.
The financial impact of the first earn out period will be disclosed as an after-reporting date event in Praemium’s half-year accounts for FY25, with no effect on profitability. Meanwhile, the earn out for the second period, based on FUA as at 15 October 2025, is still under consideration and will be treated as contingent consideration under accounting standards.
Looking Ahead
Praemium’s management appears focused on stabilising and growing the OneVue platform’s client base while extracting operational synergies. The upcoming second earn out period will be a critical indicator of whether the company’s strategic adjustments can reverse the initial FUA decline and unlock the earn out payments envisaged in the acquisition deal.
Bottom Line?
Praemium’s next earn out milestone will test whether its client retention efforts can translate into tangible financial rewards.
Questions in the middle?
- Will Praemium’s revised client terms and pricing successfully stem FUA outflows before the second earn out period?
- How materially will the agreed client terminations affect long-term earnings and platform growth?
- What contingencies does Praemium have if the second earn out period also falls short of targets?
