ARC Secures $600K Equity and $800K Debt to Buy 63.5% of Term Deposit Shop
ARC Funds Limited has secured $1.4 million through equity and debt to complete a strategic acquisition of a majority stake in The Term Deposit Shop, expanding its footprint in Australia's term deposit market.
- Raised $600,000 via equity placement at a 4.5% premium
- Secured $800,000 in unsecured private debt facilities at 12% interest
- Acquisition of 63.49% of The Term Deposit Shop Pty Ltd and 100% of TTDS Holdings Pty Ltd
- The Term Deposit Shop platform manages over $550 million in funds
- Strategic move to tap into Australia's $1 trillion term deposit market
Capital Raise to Fuel Strategic Acquisition
ARC Funds Limited (ASX: ARC) has successfully raised $1.4 million to complete a transformative acquisition, marking a significant step in its growth strategy. The company secured $600,000 through a placement of new shares priced at $0.115 each, representing a modest 4.5% premium to its last closing price. Complementing this equity raise, ARC also arranged $800,000 in unsecured private debt facilities bearing a 12% annual interest rate, due for repayment by August 2025.
Acquisition of The Term Deposit Shop
The funds raised will be applied toward acquiring a 63.49% stake in The Term Deposit Shop Pty Ltd (TTDS) and full ownership of TTDS Holdings Pty Ltd. TTDS operates an innovative online cash investment platform that simplifies term deposit investments across multiple Australian banks, building societies, and credit unions. With over $550 million in funds under management, the platform primarily serves financial planners and is approved on more than 100 Australian Financial Services Licensees' product lists.
Strategic Rationale and Market Opportunity
Australia’s term deposit market is substantial, with approximately $1 trillion in deposits. ARC’s acquisition of TTDS positions it to tap into this vast market by leveraging TTDS’s streamlined platform, which offers clients competitive rates and automated onboarding. The platform’s ability to facilitate seamless transitions between term deposits upon maturity enhances its appeal to investors seeking flexibility and maximised returns with minimal effort.
Implications for ARC Funds
This acquisition is expected to broaden ARC’s investor base by integrating term deposit clients into its ecosystem, potentially increasing funds under management. While the immediate financial impact remains to be seen, the strategic move aligns with ARC’s ambition to expand its footprint in fintech-driven investment management. The company’s ability to integrate TTDS effectively and capitalise on cross-selling opportunities will be critical to realising the acquisition’s full potential.
Next Steps and Market Reception
The placement shares are set to be issued and settled by 9 May 2025, with trading expected to resume shortly thereafter. The strong support from both new sophisticated investors and existing shareholders signals confidence in ARC’s strategic direction. Market participants will be watching closely to see how ARC leverages this acquisition to drive growth and shareholder value in the coming months.
Bottom Line?
ARC’s strategic acquisition could reshape its growth trajectory, but execution risks remain as integration unfolds.
Questions in the middle?
- How will ARC integrate The Term Deposit Shop’s platform with its existing operations?
- What are the projected financial impacts and timelines for return on this acquisition?
- Will ARC pursue further acquisitions or capital raises to expand its fintech footprint?
