Financial Services

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

HPS Investment Partners has agreed to make an investment in NFP, an insurance broker and consultant and a portfolio company of Madison Dearborn Partners (MDP) since July 2013. At closing of the transaction, expected in early 2017, Madison Dearborn will maintain a controlling stake in NFP, alongside NFP’s management and employees.

NFP (formerly National Financial Partners Corp.) provides employee benefits, property & casualty, retirement, and individual private client services. The company has more than 3,400 employees and provides its insurance brokerage and consulting services globally. Recently, NFP was ranked the 2nd fastest-growing US large-group employee benefits broker by Employee Benefit Adviser magazine; and the 5th largest global benefits broker by revenue, the 4th largest US-based privately owned broker and the 11th largest broker of US business by Business Insurance magazine. NFP is headquartered in New York (www.nfp.com).

“HPS’s investment in NFP is a further validation of the quality, performance and future opportunity of our business,” said NFP Chairman and Chief Executive Officer Douglas Hammond. “Partnering with these two investors provides us with tremendous intellectual and capital flexibility to further advance our growth initiatives and solidify our position as a world-class, diversified insurance brokerage and consulting leader.” Mr. Hammond will continue to serve in his current position and will remain the company’s largest individual shareholder.

HPS Investment Partners was originally formed as a unit of Highbridge Capital Management, a subsidiary of JP Morgan Asset Management. In March 2016, the principals of HPS acquired the firm from JP Morgan. Currently, HPS has over $33 billion of assets under management and approximately 100 investment professionals and over 200 total employees. The firm is led by its Chief Executive Officer Scott Kapnick and is headquartered in New York (www.hpspartners.com). Partner Scot French, led the transaction for HPS.

“We have an excellent working relationship with HPS, and we are pleased to have them join MDP as our partner in NFP,” said Vahe Dombalagian, a Managing Director at MDP and head of the firm’s Financial and Transaction Services team. “Together, we will utilize our combined expertise and resources in partnership with NFP’s leadership team to support NFP’s growth and build a strong, diversified business as we execute on our long-term vision for the company.”

Madison Dearborn Partners invests in privately held or publicly traded companies in the following sectors: financial and transaction services; business and government services; health care; basic industries; consumer; and telecom, media and technology services. In August 2016 the firm closed its seventh buyout fund at $4.4 billion. Madison Dearborn was founded in 1992 and is based in Chicago (www.mdcp.com).

BoA Merrill Lynch is serving as the financial adviser to NFP. Barclays is serving as financial adviser to Madison Dearborn.  Ropes & Gray is the legal advisor to both Madison Dearborn and NFP. Fried, Frank, Harris, Shriver & Jacobson is the legal advisor to HPS.

© 2016 Private Equity Professional | December 12, 2016

Renovo Capital has made an investment in DIMONT, a provider of insurance and loan services to residential and commercial financial companies.

Dimont provides insurance claims and recoveries, specialty hazard insurance consulting, and loan administrations services. Specific services include residential, commercial, and multi-family hazard insurance claims management, mortgage insurance processing, compliance, training, and audit services. Customers include mortgage servicers and government sponsored entities across the United States. The company is led by Denis Brosnan, its president and chief executive officer. DIMONT was founded in 1996 by Bernie Dimont and is based in Dallas (www.dimont.com).

DIMONT was acquired by Wingspan Portfolio Advisors in May 2013. In October 2014, Dimont was spun out of Wingspan – as a result of operating difficulties – through a recapitalization led by THL Credit, an existing mezzanine lender to DIMONT.

In connection with the buy of the company by Renovo, Mr. Brosnan has agreed to a new five-year contract to continue his role as president and chief executive officer. “I am excited by the opportunity and humbled by the confidence entrusted in me and my team by our investors to lead the company into this new era,” said Mr. Brosnan.

Renovo Capital makes control equity investments in lower middle market businesses that are experiencing operational underperformance and financial distress.  Renovo typically invests from $5 million to $25 million of equity capital in businesses with annual revenues between $20 million and $200 million. Sectors of interest include manufacturing, distribution, and services. Renovo was founded in 2009 and is based in Dallas with an additional office in Denver (www.renovocapital.com).

“DIMONT is a strong, longstanding business in a dynamic and growing sector and we are excited to partner with Denis Brosnan and his management team to support the company’s continued efforts toward product innovation and service expansions,” said David Hull, managing partner at Renovo Capital.

Renovo Capital closed its second special situations fund, Renovo Capital Fund II, LP, in September 2014 with $132 million committed capital.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-15-16

Aquiline Capital Partners has made an investment in OmegaFi, a provider of financial, membership management, and fundraising software used by college fraternities and sororities.

OmegaFi’s products assist fraternal chapters, house corporations, headquarters and foundations to optimize operations and increase revenue. OmegaFi’s tools are used to bill and collect dues and rent; manage rosters and records; pay bills and employees; file tax returns; build websites; publish newsletters and other communication pieces; engage Alumni; thank donors; process payments; and raise money. OmegaFi was founded in 1992 and is based south of Atlanta in Columbus, GA (www.omegafi.com).

“OmegaFi is the dominant player in a very specialized yet growing market, and a strong addition to our roster of innovative financial technology portfolio companies,” said Jeff Greenberg, Chief Executive of Aquiline. “It has a long history of success and a reputation rooted in cutting-edge technology, data security and superior customer service. We see significant opportunities for growth and look forward to working with the leadership at OmegaFi to continue to expand their reach and customer base.”

Aquiline Capital Partners invests in middle-market businesses across the financial services sector in banking and credit, insurance, investment management and markets, and financial technology.  The firm is based in New York (www.aquiline-llc.com).

“We are excited that Aquiline recognizes the important role our services play in the financial operations of fraternities and sororities, organizations that positively contribute to America economically and otherwise,” said Fred Maglione, Chief Executive Officer of OmegaFi. “The resources and expertise they bring will only strengthen our current capabilities and services, allowing us to grow and maintain our long-term focus on operational efficiency and success for the chapters, house corporations, headquarters and fraternal foundations that we serve.”

© 2015 PEPD • Private Equity’s Leading News Magazine • 12-8-15

Genstar Capital and Aquiline Capital Partners have entered into an agreement to acquire Ascensus from J.C. Flowers & Co.  No financial details on this transaction were announced but according to industry sources the enterprise value of Ascensus is estimated to be approximately $965 million with annual an EBITDA of $70 million.  The transaction is expected to close in the fourth quarter.

Ascensus, acquired by J.C. Flowers in 2007, is a service provider to retirement and college savings plans including defined contribution and defined benefit retirement plans, 529 college savings plans, and IRA and health savings accounts.  Ascensus supports more than 1.7 million retirement plan participants and administers more than 3.3 million 529 college savings accounts, along with more than 1.5 million IRAs and HSAs. The company is headquartered north of Philadelphia in Dresher, PA (www.ascensus.com).

This is the second acquisition that Genstar and Aquiline have cooperated on.  In 2013 the two firms partnered up on the acquisition of Genworth Wealth Management for $412 million.

Genstar, which had a final close in August 2015 of its seventh fund with $2 billion in commitments, invests from $50 million to $400 million in middle-market companies that have enterprise values from $50 million to $1 billion and EBITDAs greater than $15 million.  Genstar targets investments in financial services, software, industrial technology, and healthcare industries.  The firm was founded in 1988 and is based in San Francisco (www.gencap.com).

Aquiline Capital Partners invests in middle-market businesses across the financial services sector in banking and credit, insurance, investment management and markets, and financial technology.  The firm is based in New York (www.aquiline-llc.com).

J.C. Flowers & Co. invests in the financial services industry. Founded in 1998, the firm has invested over $14 billion of capital in 15 countries across a range of industry subsectors, including banking, insurance and reinsurance, investment banking and brokerage, and specialty finance.  J.C. Flowers has offices in New York and London (www.jcfco.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 9-29-15

Genstar Capital has signed an agreement to acquire a majority interest in Mercer Advisors from Lovell Minnick Partners.  The transaction is expected to be completed in the second quarter of 2015.

Mercer Advisors was acquired by Lovell Minnick in May 2008 and is a registered investment advisor providing financial planning, wealth management, family office services, and retirement plan design and administration primarily to high-net-worth clients throughout the United States.  The company has over 140 employees and operates nationally with 15 branch offices.  Mercer Advisors was founded in 1985 and is headquartered in Santa Barbara (www.merceradvisors.com).

Genstar Capital invests from $50 million to $400 million in middle-market companies that have enterprise values from $50 million to $1 billion and EBITDAs greater than $15 million.  Genstar manages approximately $3 billion of committed capital and targets investments in the industrial technology, financial services, software, and healthcare industries.  The firm was founded in 1988 and is based in San Francisco (www.gencap.com).

“Genstar has followed Mercer Advisors for a number of years, and this investment demonstrates our continued commitment to investing in targeted growth segments within the financial services industry,” said Anthony Salewski, Managing Director of Genstar.  “Mercer has delivered consistent growth over the past several years, and we look forward to partnering with CEO David Barton and his management team to accelerate that trajectory.”

“Genstar has a long history of supporting its portfolio companies and shares our belief in a client-centric culture and holistic service model.  Genstar’s investment will allow us to further invest in growth, both organically and through acquisitions, and elevate the value proposition we offer our current and future clients,” said Mr. Barton.

“We have enjoyed working closely with the Mercer management team over the past seven years to support the company as it has grown into the leading business it is today,” said Jeffrey Lovell, Chairman of Lovell Minnick Partners.  “We are pleased management has formed a partnership with Genstar, whose interests and plans align well with the company’s strategy.”

Lovell Minnick Partners provides buyout and growth capital to companies in the financial services industry. Lovell Minnick manages private equity partnerships with committed capital totaling over $850 million. The firm is the successor to the private equity affiliate of Putnam Lovell Securities which was established in 1999 by Jeffrey Lovell and James Minnick. Lovell Minnick has offices in Philadelphia and Los Angeles (www.lovellminnick.com).

Moelis & Company (www.moelis.com) acted as the exclusive financial advisor to Mercer in this transaction.

© 2015 PEPD • Private Equity’s Leading News Magazine • 3-26-15

The Beekman Group has acquired Direct Connect Holdings, a provider of credit and debit card payment processing services, in partnership with Matt Clyne, the company’s president and chief executive officer.

“Our interest in merchant service providers began a year ago and our search focused on businesses that were capitalizing on several exciting and value-added trends within the payment industry,” said John Troiano, Beekman’s Managing Partner.  “Matt Clyne has surrounded himself with experienced management team members, many of whom have worked together for several years prior to joining Direct Connect, and have executed on high-value growth strategies across the industry.”

The Beekman Group makes control investments from $5 million to $25 million in privately held companies, family businesses in transition, operating divisions of large companies or small public companies looking to privatize. Typical acquisitions have revenues from $10 million to $200 million and enterprise values of $15 million to $75 million.  The Beekman Group was founded in 2004 and is based in New York (www.thebeekmangroup.com).

Direct Connect represents the final investment for Beekman’s second fund which closed in December 2012 with $100 million in commitments.  The fund is composed of eight platform investments.  Just last month, Beekman closed its oversubscribed third lower middle-market fund at its hard cap of $230 million.

Direct Connect provides check and payment card acceptance and processing services across a range of formats, including credit, debit, gift, stored value and electronic benefit transfer.  The company’s service and product offerings includes mobile and website acceptance; virtual terminals for mail and telephone order processing; secure and compliant point-of-sale equipment; cash advance funding programs; terminal sales/leases and deployment; full customer, tech and merchant support; chargeback resolution; and payment card industry security compliance.  Customers include brick-n-mortar retail stores, direct mail and phone order operations, government contractors, service industries, and software developers.  Direct Connect is headquartered west of Arlington in Chantilly, VA (www.directconnectps.com).

“I am excited to have found a growth oriented partner with values that are consistent with our own and a commitment to accelerating Direct Connect’s growth to meet the potential to which the company aspires,” said Mr. Clyne, who has led Direct Connect since 2009.  “The Beekman team’s experience in building lower middle-market companies and more specifically their experience supporting its portfolio companies’ acquisition strategies, with both capital and expertise, made them the best fit to maximize our growth potential.”

Direct Connect’s debt financing was led by Goldman Sachs Specialty Lending Group, which has partnered with Beekman in financing other portfolio companies.

© 2015 PEPD • Private Equity’s Leading News Magazine • 1-22-15

DFC Global, a provider of financial services to unbanked and under-banked consumers, has been acquired by Lone Star Funds.

DFC Global is an international non-bank provider of alternative financial services, principally unsecured short-term consumer loans, secured pawn loans, check cashing, gold buying, money transfers and reloadable prepaid debit cards, serving primarily unbanked and under-banked consumers through its approximately 1,500 current retail storefront locations and its multiple Internet platforms in ten countries across Europe and North America: the United Kingdom, Canada, the United States, Sweden, Finland, Poland, Spain, Romania, the Czech Republic and the Republic of Ireland. DFC Global is headquartered near Philadelphia in Berwyn, PA (www.dfcglobalcorp.com).

Lone Star invests in real estate, equity, credit, and other financial assets. Since the establishment of its first fund in 1995, Lone Star has organized twelve private equity funds with aggregate capital commitments totaling over $45 billion. The firm is based in Dallas (www.lonestarfunds.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-16-14

Warburg Pincus has entered into an agreement to Electronic Funds Source (EFS), a provider of corporate payment services, from an investor group including First Data Transportation Services, CTP Holdings, and FJ Management. The transaction is expected to close in the second quarter of 2014.

“We believe there is a significant opportunity to build on EFS’ success and enhance and expand its fleet and corporate payments solutions.  We look forward to partnering with Scott Phillips, EFS President and Chief Executive Officer, and the management team as the company continues its impressive growth trajectory,” said Jim Neary, Managing Director and Member of the Executive Management Group, Warburg Pincus.

Electronic Funds Source is a provider of corporate payment technology services. The company’s portfolio of products includes a suite of corporate and private-label purchasing cards; cardless technology solutions; payroll solutions; money transfer solutions; back-office accounts payable and expense management solutions. The company is based in Ogden, UT (www.efsllc.com).

“The company provides innovative payment solutions leveraging a best-in-class technology platform.  EFS is extremely well positioned to continue its product innovation and strong momentum in this attractive market,” said Adarsh Sarma, Managing Director, Warburg Pincus.

Warburg Pincus has more than $35 billion in assets under management and has raised 13 private equity funds which have invested more than $48 billion in approximately 700 companies in 35 countries. The firm was founded in 1966 and is headquartered in New York with offices in Amsterdam, Beijing, Frankfurt, Hong Kong, London, Luxembourg, Port Louis, Mumbai, San Francisco, Sao Paulo and Shanghai (www.warburgpincus.com).

Warburg Pincus has a history of investing in the payments, financial technology and financial services sectors, which include current and past portfolio companies such as FIS Global, InComm, Wall Street Systems, Primerica, Santander Asset Management, Santander Consumer USA, Sterling Financial Corp and Webster Financial Corp.

Goldman Sachs, SunTrust Robinson Humphrey and Wells Fargo acted as financial advisors to EFS.  Credit Suisse and Deutsche Bank acted as financial advisors to Warburg Pincus.

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-17-14