Why ARC Funds Is Racing to Fully Acquire The Term Deposit Shop
ARC Funds Limited plans to acquire the remaining 36.51% stake in The Term Deposit Shop, offering new ARC shares in exchange. This move aims to consolidate ownership and accelerate growth leveraging TTDS’s $530 million Funds under Management.
- ARC to offer new shares for remaining 36.51% of TTDS
- Offer price set at 11.5 cents per ARC share
- Acquisition subject to shareholder approval in August 2025
- TTDS has grown Funds under Management at 42.8% CAGR over six years
- Full ownership supports ARC’s multi-affiliate growth strategy
ARC Funds Seeks Complete Control of TTDS
ARC Funds Limited (ASX, ARC) has announced its intention to acquire the remaining minority stake in The Term Deposit Shop Pty Ltd (TTDS), aiming to own 100% of the company. Following its initial acquisition of 63.49% in early May 2025, ARC is now offering to exchange new ARC shares for the outstanding 36.51% held by various investors. This strategic move is designed to fully integrate TTDS into ARC’s expanding financial services platform.
Scrip Offer Details and Shareholder Approval
The consideration for the remaining shares will be paid in ARC fully paid ordinary shares, valued at 11.5 cents each. This valuation matches the price set during ARC’s recent placement in May 2025. Minority shareholders of TTDS will receive approximately 21.72 ARC shares for every TTDS share they hold. However, this transaction is contingent on approval at an Extraordinary General Meeting scheduled for early August 2025, underscoring the importance of shareholder support for ARC’s consolidation plan.
Growth Potential and Strategic Rationale
TTDS has demonstrated impressive growth, with Funds under Management (FUM) expanding at a compound annual growth rate of 42.8% over the past six years, despite limited investment. ARC views the full acquisition as a critical step in executing its multi-affiliate platform strategy, leveraging TTDS’s existing $530 million FUM, distribution capabilities, and client base. The integration is expected to unlock further growth opportunities, particularly through enhanced marketing and distribution efforts, as well as the potential rollout of additional income products.
Management Commentary and Future Outlook
ARC’s Managing Director, Scott Beeton, emphasized the strategic importance of owning TTDS outright. He highlighted the business’s significant growth prospects and the benefits of further investment to accelerate funds growth. Beeton also noted the opportunity for TTDS shareholders to participate in ARC’s future value creation through the scrip offer. This acquisition marks the beginning of ARC’s broader growth journey, with the company committed to providing ongoing updates on progress.
About The Term Deposit Shop
TTDS offers a platform managing over $530 million in deposits, providing clients with access to competitive term deposit rates from a variety of banks, building societies, and credit unions. The platform simplifies administrative tasks and automates onboarding, allowing clients to seamlessly transition deposits upon maturity without additional paperwork. Deposits up to $250,000 are protected under the Australian Government’s Financial Claims Scheme, adding a layer of security for investors.
Bottom Line?
ARC’s full acquisition of TTDS could be a pivotal catalyst for its growth, but shareholder approval remains the key hurdle ahead.
Questions in the middle?
- Will ARC’s shareholders approve the scrip offer at the upcoming meeting?
- How will ARC integrate TTDS’s operations to maximize growth potential?
- What impact will the acquisition have on ARC’s capital structure and share price?
