TPG to Buy GlobeOp for $801.5 Million
Private equity firm TPG Capital has beat out rival Advent International in a contest to buy hedge fund administrator GlobeOp Financial.
The Fort Worth, Texas-based TPG says it will acquire GlobeOp for about 435 pence a share or $801.5 million- a 49 percent premium to the closing price of GlobeOp's shares at the close of business on January 5. That was the day before GlobeOp confirmed market speculation it was in takeover talks with TPG and the Boston-based Advent Capital.
Under the terms of the deal, GlobeOp's management including its chief executive Hans Hufschmikd will reinvest 70 percent of the money they make on the transaction into the firm and will continue operating it. Also agreeing to the offer is GlobeOp's largest shareholder TA Associates.
GlobeOp increased the amount of hedge fund assets it services by about 16 percent over the past year to reach $173 billion for 300 clients but its board ultimately decided it still needed external funds to grow and its shares were undervalued. Its relatively illiquid stock had dropped from 440 pence per share in July 2011 to under 300 pence per share in early January making the firm a prime candidate to go private.
Founded in 2000, GlobeOp provides an array of middle and back office services to hedge funds and was one of the few remaining "independent" -- hedge fund administrators. Most have been gobbled up by large custodian banks- such as Bank of New York Mellon and State Street. TPG's previous deals in the business outsourcing and financial technology sector include account processing firm FIS Global and insurance software firm Vertafore. In the past year, TPG sent $560 million to buy a minority stake in Danish online trading platform Saxo Bank.
Written by Chris Kentouris, Editor-in-chief (Chris can be contacted through Chris.Kentouris@hotmail.com)
