PRIVATE equity firm Bridgepoint yesterday signed its deal to buy Quilter, the wealth management business owned by Morgan Stanley Smith Barney, for an undisclosed sum expected to be more than £170m.
This comes just weeks after Bridgepoint bought online cycling shop Wiggle for €210m (£175.2m) in late 2011 – a year which saw the private equity firm grow its investments across a range European countries and industries.
Quilter, which can trace its ancestry back to 1777, ended last year with approximately £7.6bn of funds under management. It operates in a discretionary wealth management market worth around £400bn – an area thought to be currently under-penetrated and expected to grow as pension schemes change and personal investments increase.
This marks the second time that Morgan Stanley has sold Quilter. After originally offloading the wealth management company to Citigroup in 2006, it then took a majority stake in the business in 2009.
Morgan Stanley has been looking to sell Quilter, whose clients tend to invest around £250,000, to concentrate on multi-million pound private investments.
Bridgepoint has invested in wealth management before, buying asset management firm Tilney in March 2005. The company was then sold to Deutsche Bank in October 2006.
However, Bridgepoint’s acquisitions in 2011 were more varied, including a Swiss sports company, a French property management company, an Italian perfumery and a French clinical services group.
Bridgepoint partner Michael Black said: “Quilter is a long-established and highly regarded UK private client wealth management business operating in a large but fragmented market favoured by underlying structural growth drivers.
“As such, we believe that there is every opportunity for Quilter to accelerate its growth organically as well as make complementary acquisitions for the business.”
Martin Baines, chief executive of Quilter, added: “Under Bridgepoint ownership, Quilter will not only continue to do what it has always done best, provide highly personal investment management services to advisers and individuals, but also grow and extend what it can offer its clients.”
Oliver Wyman and PwC advised on the financial side of this deal, flanked by legal firm Linklaters.
The transaction is expected to complete in the first quarter of this year.
MEET THE LAWYERS
PRIVATE equity group Bridgepoint turned to Linklaters for legal advice on its acquisition of Quilter from Morgan Stanley Smith Barney, having used the firm for UK acquisitions in the past as well as for work in Sweden and France.
Linklaters won its first mandate for Bridgepoint back in 2007, when it helped the buyout house acquire Gambro Healthcare.
Back then the team was led by private equity head Charlie Jacobs, but this time Linklaters fielded a team led by co-head of the practice Ian Bagshaw, and including financial regulatory partner Carl Fernandes.
Bagshaw has previously worked for The Carlyle Group on its acquisition of a majority stake in Associated Dental Practices from Palamon. He also worked for Carlyle on its subsequent buyout of Integrated Dental Holdings last year, ahead of a merger between the two dental healthcare providers.
He helped Alliance Medical Group with its debt and equity restructuring at the end of 2010, and Almatis, a portfolio company owned by Dubai International Capital, on its debt financing and restructuring options
Meanwhile Roger Moore at fellow Magic Circle firm Clifford Chance acted for Morgan Stanley, while Mark Soundy at Wiel Gotshal & Manges advised the management.
Bridgepoint’s financial advice on the deal came from Evercore Partners, with PwC carrying out the financial due diligence. Elizabeth Fournier