08 November 2017

Permira Advisers buy Duff & Phelps

UK private equity group Permira Advisers has signed a USD 1,750 million deal to acquire a majority interest in Duff & Phelps. The New York-based financial consultant’s shareholders, Carlyle Group, Neuberger Berman and the University of California, are making a full exit through the transaction. Members of Duff & Phelps’ management team, however, will retain a significant stake and will resume their current roles to lead the target’s business.

Permira has obtained debt financing from UBS to finance the acquisition, which is slated to complete within the first quarter of 2018, subject to customary closing conditions.

According to Zephyr, the M&A database published by Bureau van Dijk, this is the buyer’s first acquisition in the US financial sector.

Duff & Phelps advises on asset valuation, alternative investments, compliance and regulations, disputes and investigations, mergers and acquisitions, and real estate investments, among other areas relating to corporate finance. The firm employs almost 2,500 professionals and operates from 70 offices in 20 countries. It serves industries ranging from energy and mining, to media and entertainment, and healthcare and life sciences. Its clients include more than half of the companies in the Standard & Poor’s 500 Index, and many of the top tier private equity investors, law firms and hedge fund managers.

The US company was previously listed on the New York Stock Exchange up until 2013, when it was taken private by a Carlyle Group-led consortium through a USD 666 million institutional buyout. The purchaser group included Banque Pictet, Edmond de Rothschild Suisse and Stone Point Capital, all of which divested their stakes two years following their investments. Through this same transaction in 2015, Carlyle Group doubled down on its interest in Duff & Phelps, with the University of California and the target’s management team also investing an undisclosed sum.

The transaction comes as firms in the US are faced with more stringent regulation, new accounting standards, better corporate disclosure practices and an increasing need for fair value and independent valuation assessments.

Permira’s partner Nic Volpi commented: “Companies of all sizes and across all industries demand sound, objective and independent counsel to help them execute their most important business decisions – a demand that has grown exponentially since the financial crisis.” He added that the target “is uniquely positioned to meet this demand as one of the only firms offering a full suite of advisory and consulting services with deep client relationships, meaningful scale and brand strength.”

Following the acquisition, Duff & Phelps will capitalise on its new owner’s global footprint to further expand its geographic presence through organic growth strategies and acquisitions.

Even before the announcement, Duff & Phelps was already actively snapping up companies globally. In May this year, it successfully purchased Quantera Global Asia Holding, a Hong Kong-based transfer pricing advisor. Last year, it also took over US consultants CounselWorks and Tregin Solutions, as well as Dublin-based financial advisor Corporate Finance Ireland.

© Zephyr