Cabot Square Capital has agreed the sale of its majority stake in Key Retirement Solutions Ltd to Phoenix Equity Partners. The transaction, which represents a 5x return on invested capital, remains subject to regulatory approvals and is expected to close in August.
Cabot Square Capital, a leading provider of investment capital for small and mid-sized companies in the UK and Western Europe, has agreed the sale of its majority stake in Key Retirement Solutions Ltd (‘KRS’) to Phoenix Equity Partners for an enterprise value of £35 million (including £2 million cash held on balance sheet). The transaction, which represents a 5.0x return on invested capital, remains subject to regulatory approvals and is expected to close in August.
Cabot Square Capital invested in KRS in 2006 and since then has worked alongside the management team to transform the business from a pure play equity release loan broker to a trusted provider of a broad range of financial services for people in or approaching retirement.
In addition to being the UK’s leading independent distributor of equity release loans, the business has expanded its range of products and services to include estate planning services, is a top ten distributor of annuities and, through the More2life brand, acts as a product provider for certain equity release products. Under Cabot Square Capital’s ownership, employee numbers have increased from 126 to 240.
In the year to 31 December 2012, KRS generated EBITDA of £5.2m. For the past three years, normalised EBITDA has achieved a CAGR of 28%.
KRS has been presented with numerous prestigious awards, gaining recognition from both industry bodies and customers. Awards include; What Mortgage Winner of Best Equity Release Adviser for three years in a row and Best Equity Release Customer Service for the past two years, as well as a number of awards from Mortgage Strategy and repeated recognition and awards at the Incisive Media Equity Release Awards.
Commenting on the sale of the business, James Clark, Partner, Cabot Square Capital said, “KRS has been a fantastic success story over the last six years, expanding organically and through acquisition to provide multiple offerings for people in or approaching retirement. We are pleased to have supported KRS through its significant growth period to become the UK’s leading supplier of retirement services to the over 55s, whilst at the same time retaining its status as a trusted advisor. KRS is well placed to capitalise on this momentum and we wish them all the best for the next stage of their growth.”
Colin Taylor, CEO of KRS said, “Since it was founded in 1988, KRS has evolved to become a market leading business, providing multiple product offerings to our core market of the over 55s. We appreciate the partnership and guidance we have received from the team at Cabot Square Capital and now look forward to working with our new shareholders to drive future growth.”
Notes to editors
Key Retirement Solutions
Founded in 1998 Key Retirement Solutions is the UK’s leading over 55’s specialist adviser and distributor of Equity Release loans.
Key Retirement Solutions offers a suite of financial products and services to those approaching retirement including Pension Annuities, Wills, Lasting Power of Attorney and Travel and Home Insurance.
Key Retirement Solutions is winner of over 40 industry awards including What Mortgage Best Equity Release Adviser (2012, 2011, 2010) and Best Equity Release Customer Service (2012, 2011).
Cabot Square Capital
Founded in 1996, with circa £600 million under management, Cabot Square Capital is a leading provider of investment capital for small and mid-sized companies in the UK and Western Europe.
Cabot Square Capital is a specialist hands-on partner able to provide companies with capital for growth and acquisitions, innovative management ideas, creative problem solving and strategic, long-term planning.
Cabot Square Capital owned KRS via its second fund, CS Capital Partners II. The Fund has had two prior exits, Lowell Group (debt purchase) and 5D/ Interbay (commercial mortgage lending). The combined results from these three investments is a 2.9x return on invested capital and a 35.7% IRR. CS Capital Partners II has four further investments, Compello (debt purchase), Signature Senior Living (elderly care), Medicx Group (asset management) and Medicx Pharmacy (health centre pharmacies).
CS Capital Partners III closed in 2006 and is currently invested in 9 companies in financial services, property, and infrastructure, including Perfect Home, Oakam, Centric, and EquitiX.
Cabot Square Capital is currently investing its fourth fund, CS Capital Partners IV, which closed in 2011.
Cabot Square Capital is a member of the BVCA and is regulated by the Financial Conduct Authority.
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