Jarden and Pacific Equity Partners in talks with NAB over JBWere

Jarden is believed to be in talks about a merger of its wealth management unit with NAB’s JB Were. Picture: Lukas Coch/AAP

Details surrounding Jarden’s well flagged mergers and acquisitions plans are starting to filter out, with the New Zealand-based wealth management powerhouse said to be in talks over a deal with one of Australia’s top four listed banks, NAB.

For months, Jarden’s top deal makers have been excluding themselves from internal auctions to buy shares in the business based on a big pending transaction being worked on in the background, which would have created conflicts of interest if some key players took part, based on what they knew.

Now it’s understood that the deal involves a merger of the Jarden wealth business with the NAB-owned wealth management powerhouse JBWere.

It’s a clever tie-up spearheaded by the brightest minds at Jarden, where private equity firm Pacific Equity Partners will also be brought into the mix.

The understanding is that it’s early days, but the deal involves NAB selling New Zealand’s JBWere operation into a vehicle and its existing kiwi saver retirement product business, which has about four to five per cent of the New Zealand market, and sits within NAB’s New Zealand banking subsidiary BNZ.

JBWere will own about 48 per cent of the vehicle and Jarden, which also has the Harbour Asset Management institutional funds management business, about 20 per cent, with shareholders including its wealth managers.

PEP would own the remainder.

Jarden’s investment banking business would be a stand alone unit after it was structually separated from the remainder of the company last year in preparation for a deal.

JBWere, previously part of Goldman Sachs, is considered the jewel in the crown for NAB’s operation in New Zealand.

It is a leader in the wealth management market across the Tasman and estimated to be earning about $NZ30m of annual earnings before interest, tax, depreciation and amortisation.

Jarden’s wealth business in New Zealand is headed by the highly regarded ex Blackstone executive Malcolm Jackson.

It is also highly lucrative and successful with about $NZ18bn of funds under management, generating about $NZ20m of annual EBITDA.

Jarden could extract about $NZ200m to $NZ250m from the transaction to invest into its Trans-Tasman investment banking operations, enabling it to pay down debt in a rising interest rate environment.

Spearheaded by top investment banking names Aidan Allen (ex UBS investment banking head) and Sarah Rennie (the former head of equity capital markets at Goldman Sachs), Jarden has landed itself on some big ticket transactions since it first forged its way into the Australian market amid the global pandemic in 2020, expanding from being just a New Zealand advisory firm in what has been a decade-long ambition.

It is a defence adviser to Origin Energy, which is at the centre of a buyout proposal from Brookfield and EIG and helped Mirvac Group on its $2bn build-to-rent joint venture.

PEP, which has recently had executives in New Zealand and has a strong relationship with top Jarden deal makers, likely has hopes of replicating the success of rival TA Associates with its Fisher Funds investment in New Zealand, which purchased the Kiwi Wealth business last year for $NZ310m, the business PEP itself was competing for.

When Jarden was bidding for Kiwi Wealth, the plan was to separate its wealth business and merge it together with Kiwi Wealth in a separate vehicle, also part owned by FNZ.

For the 15 months to March 31, Jarden Australia, which has about 160 staff, posted a $13.3m loss, as high costs linked to its launch contributed to the bottom line, but the business has since been restructured.

It is understood that Jarden remains on budget for the full year despite market headwinds, where high interest rates and volatile market conditions are hurting investment banking activity across the board.

Internally, Jarden announced $143m in revenue for the half year and group EBITDA of $6.6m for the period, with Investment Banking contributing $10.5m and wealth management $12.3m.