Good morning, Nina Lindholm here with the Europe Wire from the London newsroom.
Wealth management services are in demand, particularly in the UK, where the fragmented segment also offers opportunities for consolidation. This morning, Lincoln International’s Antoine Dupont-Madinier tells PE Hub about the companies he’s tracking in the sector. Spoiler – the pipeline looks promising.
Hopping over to the Nordics next. KKR has announced a growth investment in a Stirling Square Capital Partners-backed software provider for the construction industry.
We finish in Switzerland, where Aurelius has entered a share purchase agreement to acquire the EMEA metering business from SIX Swiss Exchange-listed Landis+Gyr.
Good dynamic
Lincoln International expects around 10 UK wealth management firms to enter a sale process in the next 12 months, Antoine Dupont-Madinier, managing director in Lincoln’s Financial Institutions Group, told me.
“It’s not a question of if, it’s more a question of when,” Dupont-Madinier added. “I feel quite good about that dynamic.”
Lincoln monitors around 45-50 wealth management companies in the UK. Of those, 40 are private equity-backed, signaling a high penetration rate, according to Dupont-Madinier. The investment bank advises companies starting from around £10 million ($13.3 million; €11.4 million) EBITDA, up to around £50 million, or sometimes even higher.
There has been a shift in deal processes, Dupont-Madinier noted. “Every new transaction seems to set a precedent in raising the bar in terms of granularity of data,” he said. “Data cubes are extremely detailed and becoming a cornerstone item of a successful M&A process.”
But the fundamentals in the wealth management segment have remained unchanged, said Dupont-Madinier. The highly fragmented market offers headroom for growth, driven by tailwinds such as aging population seeking retirement and wealth transfer services, he added.
PE Hub compiled recent wealth management deals into one story in June. The list includes two transactions involving UK-based businesses: A consortium comprising CVC, Nordic Capital and Abu Dhabi Investment Authority completing its take-private of Hargreaves Lansdown, which is valued at £5.4 billion ($7.0 billion; €6.5 billion), and AnaCap rebranding Wealthtime into Quanta Group, following its acquisition of Craven Street Wealth.
Brick by brick
Stepping away from wealth management. KKR has announced a growth investment in Stirling Square Capital Partners-backed Infobric, a software provider for the construction industry.
As a part of the transaction, Summa Equity will exit its minority investment in Infobric.
KKR will become a “significant” shareholder alongside majority investor Stirling Square and Infobric’s management. The new investment, along with support from Stirling Square, will enable Infobric’s further growth through product innovation, geographic expansion and strategic M&A, according to a press statement.
Based in Jönköping in Sweden, Infobric supports over 12,000 general contractors, 75,000 subcontractors and 450,000 app users in the Nordics and the UK. Its customers include Morgan Sindall, Skanska and NCC.
Stirling Square acquired a majority stake in Infrobric 2023.
KKR is making the investment primarily through its Global Impact Fund II. The investment in Infobric is the fund’s first in the Nordics.
Carving out
Let’s swap sectors again. Aurelius has entered a share purchase agreement to acquire the EMEA metering business from SIX Swiss Exchange-listed Landis+Gyr for an enterprise value of $215 million.
The transaction comprises the full metering portfolio for residential electricity, ICG electricity, gas, thermal, as well as the related integrated solutions for software and services and operations in Europe, the Middle East and Africa. Landis+Gyr is headquartered in Cham, Switzerland.
The business generated net revenues of more than $600 million in FY24 and employs around 2,700 people at five production sites across the EMEA region, according to a press statement.
That’s all from me today. Keep an eye out for the US edition by MK Flynn later today. Craig McGlashan will be with you tomorrow from Europe.
Cheers,
Nina
