New Mountain seeks buyer for ACA Compliance

New Mountain Capital has put ACA Compliance Group up for sale, three sources said.

Raymond James is advising on the process, the people said. ACA Compliance Group, of New York, provides regulatory compliance products and services, including cybersecurity and risk assessments. Clients include private fund managers, broker-dealers, as well as international and domestic banks.

The ACA auction is in mid-process, one of the sources said. The company is expected to sell for $400 million to $500 million, a different person, not one of the three, said.

Former federal and state regulators founded ACA in 2002. New Mountain invested in the company in 2013, buying a controlling stake from ACA’s founders and original partners. Rob Stype, ACA’s CEO, is listed on the New Mountain site as a management partner. An ACA co-founder, Stype spent eight years at the SEC’s office of compliance inspections and examinations. He was also branch chief for a time.

ACA has bought two companies this year: Ashland Partners & Co LLP in July and Telavance in January. Other acquisitions include Decryptex, NorthPoint Financial and Aponix Financial Technologies.

In September, New Mountain closed its fifth private equity fund on $6.15 billion, beating its $5 billion target. In 2014, the firm raised $4.13 billion for its fourth fund, while the firm’s third pool collected $5.1 billion in 2008.

New Mountain, of New York, is a generalist investor. It typically provides between $100 million to $500 million equity per deal.

DRB Holdings, which supplies devices and software for the car wash industry, said Oct. 9 that the buyout shop is buying the company from Prairie Capital. In August, New Mountain bought Sparta Systems, a provider of management system software, from Thoma Bravo.

In separate deals, New Mountain in May acquired a majority of OneDigital Health and Benefits from Fidelity National Financial Ventures, as well as a minority of Legends Hospitality LLC, a stadium management company.

Executives for New Mountain and ACA declined comment. Raymond James could not be reached for comment.

Action Item: To contact Krissy Kennedy, an ACA managing director, call her at (212) 951-1030

Photo of tooth wheel mechanism with REGULATIONS, COMPLIANCE concept words courtesy of EtiAmmos/istock/Getty Images