Lightyear to seek buyer for Wealth Enhancement

Just two months since Lightyear Capital agreed to sell Advisor Group, the New York private equity firm is putting another wealth manager on the block.

Lightyear has hired Raymond James to run a process for Wealth Enhancement Group, three sources said. Wealth Enhancement produces pro-forma, run-rate Ebitda of $35 million, one of the people said. The Plymouth, Minnesota company is expected to sell for 15x, the source said.

Founded in 1997, Wealth Enhancement provides services such as investment management, financial planning and retirement income planning for more than 12,000 households. The company oversees $11.3 billion in client brokerage and advisory assets as of April 30.

In 2015, Lightyear invested $107 million for a majority stake of Wealth Enhancement, PitchBook said. This year, Wealth Enhancement has been acquisitive, buying Planning Solutions Group LLC, Wiley Group and Summit Planning Group.

Lightyear, of New York, is a financial services-focused private equity firm. The buyout shop invests in payments, insurance and brokerages as well as asset and wealth management. Lightyear’s fourth flagship weighed in at more than $957 million, Buyouts reported in November 2017.

A sale of Wealth Enhancement would be the latest in the hot wealth management space. Genstar Capital is seeking a buyer for Mercer Advisors, Buyouts reported July 10. Mercer produces pro-forma, run-rate Ebitda of $50 million and is seeking bids of 15x to 16x, the story said.

In May, Goldman Sachs agreed to buy United Capital Financial Partners for $750 million, or around 17x to 18x, Buyouts said. Also, in May, Reverence Capital Partners inked a more than $2 billion deal for 75 percent of Advisor Group. The sellers, Lightyear and PSP Investments, retained 25 percent, Buyouts reported. In another sought after deal, Genstar paid $1.7 billion to buy Cetera Financial last year, Buyouts said.

Lightyear declined comment. Raymond James and Wealth Enhancement couldn’t be reached for comment.

Action Item: For more information, contact Wealth Enhancement CEO Jeff Dekko by calling (763) 417-1700