Australia's PEP to exit investor services business AST
Pacific Equity Partners (PEP) is poised to exit American Stock Transfer & Trust (AST), its longest-held portfolio company, following an agreement to sell the business to US-based Siris Capital.
The aggregate purchase price is $595 million on a cash-free, debt-free basis. This was disclosed in a filing by Equiniti Group, a UK-listed financial and administration services provider that Siris agreed to acquire for GBP673 ($929 million) in May. The private equity firm intends to merge the two businesses.
Australia-based PEP bought AST – the largest stock transfer agent in the US – in 2008 from the Karfunkel family for an enterprise valuation of approximately $1 billion, AVCJ Research’s records show. The deal was supported by $335 million in debt. The initial goal was to merge AST with Link Market Services, an Australian share registry business being positioned for international expansion.
PEP made the acquisition via its fourth fund, which closed in 2007 at A$4 billion ($3 billion), including A$1.3 billion in non-discretionary co-investment capital. The firm’s sixth fund closed at A$2.5 billion last year. The next oldest company in the PEP portfolio was acquired in 2015. Link was exited in 2016. Since then the private equity firm has tried to buy the business once again, albeit unsuccessfully.
Founded in 1971, AST describes itself as a full-service, technology-enabled professional services firm. Its offering includes cap table management, transfer agent and registrar services, corporate governance and advisory services, issuer and mutual fund proxy services, equity plan solutions, restructuring services, and class action and mission-critical services.
Equiniti, which generated GBP471.8 million in revenue last year, provides a similar suite services to a similar type of customer. Siris wants to create “a scaled, best-in-class share registrar with a diversified portfolio of ancillary products that will be well-positioned to meet the evolving needs of its customers, employees and other stakeholders.”
Established in 2011, Siris is a specialist technology and telecommunications investor that has raised more than $5.9 billion to date. It targets deals in the $500 million to $5 billion range.
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