TLDR: EZL sells for a market cap of A$210m (A$1.35/share). It has agreed to sell its Capital Markets business to BMO for A$145m in cash and return all of the post-tax proceeds to shareholders. What you keep is a debt-free, A$5 billion private wealth business with A$100m of net assets of which A$68m is available cash .This one may be too boring for a TripleS writeup, but I thought it was worth sending out. Thanks as usual to SpecialSitsDigest where I found this idea.Also, a reminder, I will be presenting at this conference:Many of my friends and colleagues will be speaking, so please join us.😊Thanks for reading Triple S Special Situations Investing! Subscribe for free to receive new posts and support my work.The setupEuroz Hartleys is Western Australia’s largest private wealth, institutional and corporate finance business.It has two divisions: Capital markets and Private WealthCapital Markets is getting sold to BMO for A$145 millionIts private wealth arm has 58 advisers, roughly A$5.1bn of funds under management and A$10.5bn of funds under advice.What BMO is actually buyingA$145 million, cash, for a business generating about half of EZL’s revenue, and BMO will enter into a series of concurrent agreements upon sale. “As part of the Transaction, Euroz Hartleys and BMO will enter into a strategic alliance agreement (designed to preserve the longstanding and interconnected relationship between the Capital Markets and Private Wealth businesses following completionThe Alliance Agreement is expected to support continued collaboration, research access, distribution opportunities, deal flow and broader market connectivity.The agreement will have an initial term of 4 years, with the option to renew for successive 2-year terms by mutual agreement.In addition, Euroz Hartleys will retain its trading, clearing and settlement function and continue to provide trading, clearing and settlement services to the Capital Markets business under a separate agreement with an initial term of 4 years and the option to renew for successive 2-year terms by mutual agreement.Under this arrangement, BMO will pay the costs associated with the provision of these services and contribute additional capital to support the incremental liquidity and regulatory capital requirements associated with facilitating Capital Markets trading activity.Euroz Hartleys will also provide agreed transitional services to the Capital Markets business under a separate agreement with an expected initial term of 6 to 12 months, which can be terminated early or extended as may be mutually agreed between the parties.Under this arrangement, BMO will pay the costs associated with the provision of these services.”And of course, EZL will keep the Private Wealth Management Business.The distribution mathThe company hasn’t given a per share number.With A$145m, subject to completion adjustments, I am expecting ~A$140m after transaction costs.The tax cost base of what’s being sold isn’t public.What we know is the following:“Euroz Hartleys intends to distribute the post tax net proceeds of this sale to shareholders through a combination of a fully franked dividend and capital return.Net proceeds will be determined after separation and transaction costs, tax on sale proceeds and customary completion adjustments.Further details regarding the return of proceeds, including the mix between fully franked dividend and capital return, the expected tax treatment for shareholders and the expected ongoing capital position of Euroz Hartleys will be provided in the Notice of Meeting.The proposed capital return will be subject to Euroz Hartleys shareholder approval and a class ruling from the Australian Taxation Office (“ATO”) confirming its tax treatment for shareholders.”I am guessing after everything is all said and done, it will be on the order of 65 cents per share.However, there will be franking credits also involved which creates more value for Australians holding this security.The wealth management businessThe second half of 2025 report showed 76m of revenue and A$13.84m of net profits after tax across both business units. That’s a pretty attractive run rate.Half of the revenue was related to the wealth management and brokerage business which is being retained.Debt: zero. No bank debt, no notes, nothing.Cash: Total cash and equivalents at 31 December was A$101.7mA$67.7m is actual cash at the bank and on hand that is available.The company’s reported net tangible assets is ~.42 cents per shareSo what are you paying for the wealth business?Current stock price of $1.35 with an expected distribution of $0.65 and a NTA of $0.42 so the implied remaining value is $0.28 cents or ~A$45m.For that A$45m you get a wealth management and brokerage business that generated around 1/3rd of the 13.8 Million NPAT in the last half of 2025.RisksOne of the biggest risks I see here is the revenue breakdown as brokerage made up a decent chunk of the private wealth cash flow.The Alliance and Brokerage Agreement runs an initial term of four years, renewable for successive two-year terms by mutual agreement, and I imagine it will not be renewed in four years.So, the company will need to work on replacing that portion of the revenue over the next four years with other relationships and books of business, although it is entirely possible BMO doesn’t want to deal with Australian customers and intends to focus on its banking business. Regardless, you are getting the wealth business at what I would consider a cheap multiple as of this moment.ConclusionAs I mentioned, this isn’t a multi-bagger, or anything like that, but I find it an interesting setup and given the franking credits, I think it might be a good purchase for some of my readers.I’ll be back with some more speculative and potentially higher return opportunities with my next write up.If you enjoyed this write-up, please like and restack.I don’t get paid to do this, so consider that my reward.Substack seems to throttle free article writers, which makes attracting new readers difficult. I do not want to charge for this substack, but the algorithm may end up requiring it. I am trying to avoid this, so please spread this substack if you can.Also, if you have other ideas I should write about, my DMs are always open on Substack and Bluesky :)All writeups are subject to our TOSThanks for reading Triple S Special Situations Investing! 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