The Carlyle Group has agreed to acquire Dallas-based BenefitMall, a provider of employee benefits and payroll services to small and medium sized businesses. The seller was an Austin Ventures-led investor group. No financial terms were disclosed. Sandler O’Neill + Partners L.P. provided financial advice to Carlyle on the deal.
Dallas, TX – Global alternative asset manager, The Carlyle Group (NASDAQ: CG), today announced that it has agreed to acquire BenefitMall, a provider of employee benefits and payroll services to small and medium sized businesses across the U.S., from an investor group led by Austin Ventures. The transaction is subject to customary conditions and is expected to close by year-end. Financial terms were not disclosed.
Carlyle Managing Director Jim Burr said, “BenefitMall is an established player with significant growth potential. Through capital investment, an expanded salesforce, and Carlyle’s industry experience and network, we believe BenefitMall can expand and take significant market share as the demand for integrated benefits, payroll and related products and services continues to grow within an increasingly complex regulatory environment. We look forward to supporting BenefitMall and working with the entire talented management team.”
Austin Ventures General Partner Joe Aragona said, “It has been a pleasure working with the BenefitMall team. As we close this partnership for a second time, we are confident that The Carlyle Group combined with BenefitMall will create the perfect partnership to promote continued growth and success as a significant player in the employee benefits and payroll market for SMBs.”
BenefitMall CEO Bernard DiFiore and President Scott Kirksey said, “Carlyle is the right partner to help take BenefitMall to the next level of success. We have enjoyed working with Austin Ventures and appreciate their support these past five years.”
Founded in 1979, BenefitMall is the largest national General Agency and the second-largest privately-owned payroll services firm in the U.S., serving 200,000 small and medium-sized businesses, and partnering with a network of 20,000 brokers and CPAs.
Equity for this investment will come from Carlyle Global Financial Services Partners II, a $1 billion fund that invests in financial service firms globally. Carlyle’s financial services team has extensive experience in the insurance services industry, including investments in AA Ireland, Barbon Insurance Group, Edgewood Partners Insurance Center (EPIC), JenCap Insurance Solutions and PIB Limited.
Carlyle advisors: Sandler O’Neill + Partners, L.P. – financial; Wachtell, Lipton, Rosen & Katz – legal; PricewaterhouseCoopers – accounting and tax.
Headquartered in Dallas, BenefitMall partners with a network of 20,000 Brokers and CPAs to deliver employee benefits and payroll services to more than 200,000 small and medium-sized businesses. By combining payroll and benefits, BenefitMall empowers Trusted Advisors to develop the best employee programs while maintaining compliance with government regulations and Health Care Reform. BenefitMall, the largest national General Agency merged with the second largest privately held payroll company, CompuPay. BenefitMall also operates HealthCareExchange.com, the leading online community for information regarding the Patient Protection and Affordable Care Act. More information is available at www.benefitmall.com.
About The Carlyle Group
The Carlyle Group (NASDAQ: CG) is a global alternative asset manager with $174 billion of assets under management across 306 investment vehicles as of September 30, 2017. Carlyle’s purpose is to invest wisely and create value on behalf of its investors, many of whom are public pensions. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Market Strategies and Investment Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, real estate, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1,550 people in 31 offices across six continents.
About Austin Ventures
Austin Ventures (AV) has worked with talented entrepreneurs to build valuable companies for over 30 years in the technology, business services and industrial markets. With $3.9 billion of capital, AV is one of the most established venture capital firms in the nation. AV invests in early stage and middle market companies with a geographic focus on Texas.