ARC Funds (ASX: ARC) has procured acceptances to acquire an additional 10.99% stake in The Term Deposit Shop Pty Ltd (TTDS), bringing its total ownership position to 74.48%. The strategic scrip acquisition consolidates ARC Funds’ TTDS holdings in a platform managing over $530 million in funds under administration.
Under the extended transaction structure, ARC will issue 3,584,262 fully paid ordinary shares at an exchange ratio of 21.72 ARC shares per TTDS share, valued at 11.5 cents per ARC share. The transaction, which covers 165,000 Target Shares, is expected to complete by 5 February 2026. ARC’s ownership stake in TTDS initially stood at 63.49% following its May 2025 acquisition of a controlling interest.
The acquisition follows a July 2025 offer for all remaining TTDS shares, which was partially accepted and subsequently withdrawn for non-accepting minority shareholders in August 2025. ASX confirmed the transaction does not trigger Listing Rule 11.1.2, allowing completion under ARC’s existing placement capacity under Listing Rule 7.1.
For retail investors, the transaction represents ARC’s continued execution of its stated strategy to acquire and consolidate cash-flow positive businesses. The increased stake strengthens ARC’s control over a core portfolio asset with established revenue generation and scalability potential.
What is The Term Deposit Shop and how does it work?
The Term Deposit Shop operates as a digital platform connecting retail investors to competitive term deposit rates across multiple Authorised Deposit-taking Institutions (ADIs), including banks, building societies, and credit unions. The platform manages all administrative tasks, provides automated client onboarding, and enables seamless rollovers between institutions at maturity without additional paperwork.
All deposits up to $250,000 are protected by the Australian Government’s Financial Claims Scheme guarantee, providing downside protection for platform users. With over $530 million in funds under administration, TTDS has established material scale within the retail deposit aggregation segment.
For investors assessing ARC’s portfolio, TTDS represents the company’s core asset in terms of both ownership concentration and strategic focus. The platform’s automation capabilities and established user base position it for scalable growth in client numbers and funds under administration, provided ARC continues platform investment as stated.
Key Platform Features:
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Multi-ADI Rate Access: Single interface to compare and capture competitive deposit rates across various financial institutions
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Automated Onboarding: Streamlined client registration process reducing friction for new users
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Government-Backed Protection: All deposits up to $250K covered under Australian Government’s Financial Claims Scheme
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Paperwork-Free Rollovers: Automated transitions between institutions at term maturity to capture optimal rates
Transaction mechanics
The scrip offer structure involved ARC Funds procuring acceptances for 165,000 Target Shares representing 10.99% of TTDS’s issued capital. Each accepting minority shareholder receives 21.72 ARC shares per TTDS share, with ARC shares valued at 11.5 cents for transaction purposes.
ASX confirmed the acquisition does not trigger Listing Rule 11.1.2, which governs significant changes to activities or scale. ARC will issue all shares under its existing Listing Rule 7.1 placement capacity, avoiding the need for shareholder approval.
The transaction timeline extends completion to 5 February 2026, following an agreement between ARC and accepting minority shareholders to extend the original offer period. This extension followed ASX’s regulatory confirmation, removing a material completion condition.
| Metric | Detail |
|---|---|
| Shares Acquired | 165,000 Target Shares |
| Ownership Pre-Transaction | 63.49% |
| Ownership Post-Transaction | 74.48% |
| ARC Shares Issued | 3,584,262 |
| Issue Price | 11.5 cents |
| Exchange Ratio | 21.72 ARC shares per 1 TTDS share |
For shareholders, the scrip structure means no immediate cash outlay for ARC, preserving balance sheet capacity for further acquisitions or platform investment. However, the share issuance of 3.58 million shares represents modest dilution to existing shareholders, which must be weighed against the strategic benefit of increased TTDS control.
ARC’s broader portfolio strategy
TTDS represents the core holding within ARC’s diversified portfolio of financial services and media businesses. The company’s investment strategy focuses on acquiring cash-flow positive businesses that enhance its investment platform and broaden opportunities for retail investors.
ARC’s current portfolio holdings demonstrate a mix of majority and minority stakes across complementary sectors, with TTDS holding the largest ownership concentration and strategic importance. The portfolio structure enables ARC to pursue both operational control (where it holds majority stakes) and strategic partnerships (minority positions).
Portfolio Companies & Ownership:
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Ausbiz Capital: 26.35% ownership stake
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Merewether Capital: 72% ownership stake
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The Term Deposit Shop: 74.48% ownership stake (post-transaction)
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ARC Funds Operations: 100% ownership (wholly-owned subsidiary)
The portfolio composition reflects disciplined capital allocation toward revenue-generating assets, with TTDS positioned as the primary driver of funds under administration and operating cashflows. According to company commentary, TTDS currently manages over $530 million in funds under administration, representing the largest asset base across ARC’s holdings.
For investors evaluating ARC’s growth trajectory, the increased TTDS stake signals management’s conviction in the platform’s scalability and cash generation potential. The company continues to seek additional acquisition opportunities that align with its stated objective of empowering Australians with simpler access to investment opportunities across multiple asset classes.
Management perspective
Managing Director Scott Beeton positioned the acquisition as consistent with ARC’s core strategy of acquiring and consolidating cash-flow positive businesses. Management commentary emphasised both the immediate strategic fit and longer-term growth potential through platform enhancement and client expansion.
Management Commentary
“This increased ownership is consistent with our stated objective of acquiring cash flow positive businesses. This business has significant growth opportunities and will benefit from further investment to enhance the platform and to grow the number of clients and FUA on the platform,” said Scott Beeton, Managing Director of ARC Funds.
The statement highlights management’s focus on two key growth levers: platform investment to improve user experience and functionality, and client acquisition to expand funds under administration. With over $530 million already on the platform, TTDS provides established proof of concept, reducing execution risk compared to earlier-stage ventures.
For retail investors, the management outlook suggests ARC will prioritise capital allocation toward TTDS platform development rather than near-term distributions. The growth strategy implies a reinvestment phase aimed at scaling the business before extracting maximum cash generation.
What comes next for ARC and TTDS
With completion expected by 5 February 2026, ARC’s immediate focus centres on finalising the transaction and integrating the additional 10.99% stake. Post-completion, management has indicated that TTDS will benefit from further investment to enhance platform capabilities and accelerate client growth.
The platform’s existing base of over $530 million in funds under administration provides a foundation for organic expansion. Potential growth drivers include enhanced digital functionality, expanded ADI partnerships, and targeted marketing to increase client acquisition. The automated onboarding and rollover features position TTDS to scale efficiently without proportional increases in operational overhead.
Beyond TTDS, ARC continues to evaluate further acquisition opportunities across its portfolio companies and new targets that align with its cash-flow positive investment criteria. The company’s diversified holdings in Ausbiz Capital (26.35%), Merewether Capital (72%), and wholly-owned ARC Funds Operations provide multiple pathways for capital deployment.
For investors, the key metrics to monitor include TTDS funds under administration growth rates, client acquisition numbers, and operating cashflow progression. Any additional stake increases in portfolio companies or new acquisitions would signal continued portfolio consolidation, potentially requiring further equity issuance or debt capacity utilisation.
The transaction strengthens ARC’s position in the retail deposit aggregation market while maintaining balance sheet flexibility for future opportunities. Platform scalability remains the critical factor determining whether the increased ownership stake translates into meaningful shareholder returns.
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