BY Fraser Tennant
In a deal that will take it private, fiduciary wealth management firm Focus Financial Partners Inc is to be acquired by affiliates of US private equity firm Clayton, Dubilier & Rice (CD&R) in an all-cash transaction valued at $7bn.
Under the terms of the agreement, Focus’ stockholders will receive $53 in cash per share, representing an approximately 36 percent premium to Focus' 60-day volume weighted average price as of the close on 1 February 2023.
“Focus represents an outstanding collection of leading registered investment advisers (RIAs) and business managers,” said David Winokur, a partner at CD&R. “Our investment is predicated on having greater financial and operating flexibility as a private company in order to support and drive collaboration amongst these entrepreneurial partners.”
Funds managed by Stone Point Capital LLC have agreed to retain a portion of their investment in Focus and provide new equity financing as part of the transaction.
“We are excited to be continuing the journey with the Focus partnership,” said Fayez Muhtadie, managing director of Stone Point. “We firmly believe in the secular tailwinds supporting the wealth management industry and that Focus, as a private company, will be even better positioned to capitalise and continue its track record of growth.”
The board of Focus has approved the proposed transaction on the recommendation of a special committee of all the independent directors of Focus.
“This transaction represents an important evolution in the resources we will have to invest, enabling us to increase the value we deliver to our partners and their clients,” said Rudy Adolf, founder and chief executive and chairman of Focus. “Our diverse and growing partnership creates enduring advantages and we are pleased to have reached an agreement with CD&R that delivers significant immediate cash value to Focus’ stockholders.”
Closing of the transaction – which is expected in the third quarter of 2023 – is subject to stockholder approval, regulatory approvals and other customary conditions.
Mr Adolf concluded: “We are uniquely positioned to capitalise on industry trends while offering the expertise and resources that help our partners provide differentiated service to their clients.”
News: CD&R to take Focus Financial private in over $7 bln deal