TA Associates has acquired Wealth Enhancement Group from Lightyear Capital which has been the majority owner of the company since June 2015.
Wealth Enhancement Group’s services include financial planning, estate planning, retirement income planning, insurance, tax strategies and investment management services. The company manages more than $11 billion in assets from more than 17,000 clients. Wealth Enhancement, founded in 1997 and led by CEO Jeff Dekko, has more than 250 employees, 26 branch offices, with a headquarters near Minneapolis in Plymouth, MN (www.wealthenhancement.com).
“Lightyear’s funds invested in Wealth Enhancement with the view that smaller registered investment advisors would benefit from the centralized planning, marketing and operational resources afforded by the company’s scale,” said Mark Vassallo, managing partner of Lightyear. “Since the acquisition, Wealth Enhancement has invested significantly in its core operating platform and made ten geographically diverse acquisitions, increasing assets by 150%, bringing the company into six new markets and doubling the number of offices and advisors. It’s been a fantastic four years with Jeff and his team, and we wish them continued success.”
“Having been well-acquainted with TA Associates for over half a decade, we are entering this new partnership with a sense of familiarity combined with excitement about our future, as they are an attractive partner to support the next phase of our growth,” said Mr. Dekko. “TA Associates stands out in terms of its global scale, its significant expertise in the financial services sector, its embrace of our long-term growth vision, and its strong alignment with our company’s core values and culture.”
TA makes equity investments of $75 million to $500 million in middle-market growth companies that are active in technology, healthcare, financial services, consumer and business services. In April 2019, TA held a first, final, and hard cap closing of its thirteenth fund, TA XIII LP, with total capital commitments of $8.5 billion. The firm was founded in 1968 and has more than 85 investment professionals with offices in Boston, Menlo Park, London, Mumbai and Hong Kong (www.ta.com).
“Driven largely by robust long-term market performance, demographic changes and an overall accumulation of wealth, we believe that the independent wealth management market will continue to perform well,” said Todd Crockett, a managing director at TA. “In a relatively fragmented market, Wealth Enhancement has implemented a differentiated strategy that has led to consistent growth and strong customer retention rates, which we believe has positioned the firm well for the future. We are excited to partner with the Wealth Enhancement team to help them further drive value into the business.”
Lightyear, the seller of Wealth Enhancement, makes control investments in North America-based, middle-market financial services companies. Subsectors of specific interest include asset and wealth management, payments and processing, banking, brokerage, insurance, and specialty finance. Lightyear is headquartered in New York (www.lycap.com).
MidCap Financial was the Administrative Agent, Joint Lead Arranger, and Collateral Agent on a senior secured credit facility that supported TA’s buy of Wealth Enhancement. MidCap’s deal team was led by Nino Cordoves. MidCap Financial, in alliance with its investment manager Apollo Capital Management, is a middle-market focused, specialty finance firm that provides debt of $10 million to $750 million to companies across all industries.
Raymond James was the financial advisor to Wealth Enhancement on this transaction.
© 2019 Private Equity Professional | October 7, 2019