Genstar launches process for Mercer Advisors

Genstar Capital has put Mercer Advisors up for sale after a four-year hold, four sources said.

Goldman Sachs is advising on the process, people said. Mercer produces pro-forma, run-rate Ebitda of $50 million and is seeking bids of 15x to 16x, sources said.

Founded in 1985, Mercer is a wealth-management firm that provides fee-only investment management, financial planning, family office services, retirement benefits and distribution planning. Mercer Advisors is the parent of Mercer Global Advisors, a registered investment advisor with more than $15 billion in client assets. It employs more than 350 people.

Genstar acquired Mercer in May 2015. Lovell Minnick Partners, the seller at that time, retained a stake.

A couple months ago, Genstar launched a smaller process for Mercer and was seeking bids of 15x for the Denver company, one of the sources said. Firms including Aquiline Capital Partners, Reverence Capital Partners and Crestview Partners were interested, but the auction did not result in a sale, the person said.

The Mercer transaction is the latest in the wealth management space. In May, Goldman Sachs agreed to buy United Capital Financial Partners for $750 million, or around 17x to 18x, Buyouts reported. Also in May, Reverence agreed to acquire 75 percent of Advisor Group. The sellers, Lightyear Capital and PSP Investments, retained 25 percent. The deal was valued at more than $2 billion, Buyouts reported.

Warburg Pincus won the auction for Kestra Financial in February. Stone Point Capital was the seller. Kestra, an independent broker-dealer with about 1,800 registered representatives, was valued at $830 million to $850 million, Buyouts said.

Genstar and Aquiline declined comment. Executives for Goldman, Mercer, Reverence and Lovell Minnick could not be reached for comment.