PE dominates Ascensus auction

Private equity is in the lead for Ascensus, the retirement-plan provider backed by Genstar Capital and Aquiline Capital Partners, three sources said.

The Ascensus process launched several weeks ago, attracting interest from several large buyout shops, sources said. Multiple firms are still in the process, people said Friday. Strategics are, for the most part, out of the running, sources said.

“The lead bidders are private equity,” one of the sources said.

The Ascensus auction has already gone through two rounds. A third is expected in mid-to-late October, the person said. Ascensus is expected to fetch $2.2 billion, Buyouts has reported.

Ascensus, Dresher, Pennsylvania, provides retirement-plan services, like outsourced record-keeping and administration, to defined-contribution plans and IRAs.

Genstar and Aquiline acquired Ascensus for $850 million in December 2015. JC Flowers was the seller.

Barclays and JP Morgan are advising on the process, Buyouts reported.

The deal comes during a boom time for PE. PE firms are flush with cash, having amassed more than $1 trillion in dry powder, Preqin said. The M&A market is surging, with many companies selling for high multiples.

Ascensus reportedly generates Ebitda of about $150 million and could sell for 15x. Large buyout shops like Blackstone, KKR, GTCR and Hellman & Friedman were expected to be interested in the company, Buyouts said.

New York-based Aquiline is a financial-services-focused PE firm. The buyout shop used its third fund to invest in Ascensus, PitchBook said. Aquiline Fund III closed on more than $1.1 billion in April 2016.

Aquiline in May acquired RIA in a Box LLC, a software-as-a-service provider of compliance solutions for the registered investment adviser sector.

Genstar, which invests in sectors including financial services, software, industrial technology and healthcare, closed its seventh fund on $2 billion in 2015. The San Francisco PE firm raised $3.95 billion with its eighth flagship in 2017.

In July, Genstar won a highly publicized auction for Cetera Financial Group, outbidding Lightyear Capital, which had been considered to shoo-in to win.

Executives for Ascensus, Genstar, Aquiline, Barclays and JP Morgan could not immediately be reached for comment.

Action Item: Contact Ascensus CEO Bob Guillocheau at bob.guillocheau@ascensus.com