Equistone buys Palatine's Wealth at Work in £50m SBO

JosУЉ Rojo
13 August 2015

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Equistone Partners Europe has supported the ТЃ50m management buyout of Liverpool-headquartered Wealth at Work from Palatine Private Equity in an all-equity transaction.

Palatine, which entered the company's capital structure via a secondary buyout in October 2011, scored a 3.5x return as it divested its majority stake in Wealth at Work. However, the GP is to remain as shareholder in the business as it reinvested in return for a minority interest.

Also investing alongside Equistone were members of Wealth at Work's management team, including CEO David Cassidy.

The deal represents the maiden UK investment for Equistone's fifth fund, which raised €2bn when it held its final close in April 2015, above its €1.75bn target. Prior to Wealth at Work, the vehicle was used during the SBO for German automotive components manufacturer Rhodius in May and the MBO for Munich-headquartered fashion group Tristyle Mode in July.

The fresh funds will assist Wealth at Work as it seeks to continue its expansion. The business foresees growth amid the increasing need among employees to receive guidance regarding policy and market changes to pension schemes and other benefits.

Under Equistone's stewardship, the company is aiming to grow via targeted acquisitions, with a number of opportunities to be considered in the coming months.

The exit is the fourth for Palatine's first fund. Previously divested assets include UK businesses XLN Telecom, Air Energi and Hallmark Hotels, sold by Palatine for a 4.5x, 3x and 2x return, respectively.

Previous funding
According to unquote" data, Wealth at Work first came under private equity ownership in June 2009, when LDC carved out the business, then called JP Morgan Invest, from parent JP Morgan Asset Management. The MBO, the result of JP Morgan's strategy to divest non-core assets, was initiated by CEO David Cassidy.

After two years as a shareholder, LDC sold its majority stake in Wealth at Work to Palatine, which invested via its first fund. The SBO, announced in October 2011, was understood at the time to value the business at around £6m.

Company
Founded in 2005, Wealth at Work provides financial and benefit education services to employees. According to its figures, it has offered guidance to more than 80,000 professionals at Marks & Spencer and other large employers since inception.

Headquartered in Liverpool, the business currently employs a workforce of 120 people.

People
Palatine partner Gary Tipper led the deal for the GP. Meanwhile, Equistone was represented by partners Steve O'Hare and Dominic Geer, who were appointed to the company's board as non-executive directors after the buyout. David Cassidy is CEO at Wealth at Work.

Advisers
Equity – KPMG, Nick Roome, Paul Kelly, Chris Hardman (Legal); Deloitte, Andy Westbrook, Olly Tebbutt, Harry Jones, Richard Bell, Dan Wright, Andrew Power (Corporate finance, financial & commercial due diligence).
Company – DWF, Jonathan Robinson, Katy Philips (Legal).