ACCC approves discounted MUFG takeover of Grow

• Japanese financial giant MUFG acquired troubled superannuation technology firm Grow for $78 million.
• The transaction valued Grow at less than a third of its previous $250 million valuation.
• The regulator noted Grow faced severe operational challenges and an unsustainable financial future following a failed system migration.

The Australian Competition and Consumer Commission approved the takeover of Grow by Mitsubishi UFJ Financial Group (NYSE:MUFG) for $78 million following operational failures at superannuation fund HESTA.

The sale price represented a sharp drop from the $250 million valuation the technology provider held last year.

"Market enquiries indicated that larger superannuation funds generally did not consider Grow to be a competitive alternative due to concerns regarding its financial stability and depth of experience," said ACCC Commissioner Gina Cass-Gottlieb.

Operational failures during a migration left 1.1 million members without online access for six weeks, leading to a monthly burn rate of $3 million and an annual loss of $34 million.

The transaction allows Series E investors to recover funds while existing venture capital backers face substantial losses.

Following the announcement, the MUFG share price was unchanged at $22.65.

HESTA previously injected $20 million into the technology vendor during an emergency funding round to maintain ongoing operations.

The regulator concluded the target firm lacked the long-term capital required to remain a viable independent market competitor.