Two Bidders Are Vying for Advisor Group

Bloomberg reported this week that non-public fairness agency Centerbridge Companions was in talks with Lightyear Capital to buy unbiased dealer/vendor community Advisor Group for greater than $2 billion. However sources accustomed to Centerbridge mentioned its likelihood is on no account assured. It's one in all two teams of personal fairness corporations submitting closing bids, due Friday.

An funding banking supply near the negotiations instructed WealthManagement.com that the method was down to 2 bidders, each of which have teamed up with one different personal fairness agency. So whereas there are 4 corporations searching for to buy Advisor Group, together with Centerbridge, there are solely two provides within the working. Genstar Capital, which owns competing IBD community Cetera Monetary, just isn't concerned.  

Lightyear is searching for between $2.2 billion and $2.7 billion for the IBD community, which incorporates Royal Alliance, FSC Securities, SagePoint Monetary and Woodbury Monetary. The agency has greater than 7,000 advisors.

A deal might be imminent, based on funding banking sources. However with the way in which these offers usually play out, bidders typically take a number of weeks after bids are on account of conduct confirmatory due diligence and kick the tires.

“It's well-known that non-public fairness corporations have an interest on this trade," mentioned a spokesperson for Advisor Group. "Given the success of Advisor Group, it's not stunning this may result in deal hypothesis in regards to the firm, and we don’t touch upon hypothesis.”

Genstar was reportedly in talks to amass Advisor Group earlier this 12 months, however talks broke down. At the moment, Advisor Group was valued at $2 to $2.2 billion.

“If Lightyear feels that they’re not capable of get the valuation that the prior Genstar talks landed at, they'll greater than doubtless maintain off on additional pursuing a transaction in the intervening time,” one supply mentioned.

Advisor Group’s earlier proprietor, insurer AIG, offered the dealer/sellers to Lightyear and PSP Investments, a Canadian pension fund funding supervisor, in 2016.

“That is form of a continuation of the pattern of personal fairness promoting to non-public fairness, so I believe, it is most likely a chance sale by Lightyear,” mentioned Ed Higham, managing director of worldwide funding banking, Raymond James | Silver Lane. “They have not owned Advisor Group that lengthy. However you are seeing increasingly personal fairness to non-public fairness exits in sort of shorter time frames as of late."

Centerbridge beforehand owned Focus Monetary Group, a consolidator for registered funding advisory corporations, which went public final summer season.

“Centerbridge has an excellent observe report of investing in these market-leading companies and trade consolidators throughout totally different industries,” mentioned Carolyn Armitage, managing director of Echelon Companions. “They do have good expertise taking giant cap personal corporations into public markets. Since 2006, they've invested in 10 monetary providers corporations, and the one one which's been a direct funding within the wealth administration house is Focus Monetary. That was an early funding that actually has paid off for them.

“Advisor Group is a little more mature firm with scale."