Phoenix Equity Partners, a UK middle-market private equity firm, has acquired a majority stake in Key Retirement Solutions (KRS) for a gross consideration of GBP35m, including GBP2m of cash held on balance sheet, from Cabot Square Capital.
Completion of the deal remains subject to regulatory approval.
KRS is a UK distributor of equity release loans and annuities. It also provides estate planning services, whilst its subsidiary More2Life is a significant and fast growing equity release lender. In the year to 31 December 2012, KRS generated EBITDA of GBP5.2m, and employs 240 people. This is the ninth investment from Phoenix’s GBP450m fund, which was raised in 2010.
Phoenix is backing the existing management team of KRS, led by chief executive Colin Taylor, to build the go to brand for financial products and related services for consumers nearing or in retirement. The management team are investing alongside Phoenix in this acquisition.
As the original founder of Partnership Assurance in 2005, Phoenix has strong experience of the UK retirement services market. This sector offers substantial growth prospects given demographic trends, the continuing decline in defined benefit pension schemes and the concurrently growing need for self-provision in retirement, and the pressures on retirement income due to low savings rates and rising living costs.
This transaction, strongly supported by Phoenix’s capital and strategic expertise, marks the launch of a new growth phase for the company, helping management accelerate their growth plans. The team’s focus is on continuing to build a resilient and diversified business, through the further development of KRS’s existing offering, the launch of new products, and the potential acquisition of complementary businesses. The aim is to consolidate KRS’s position as the leading provider of high quality, cost-effective financial products and services addressing the needs of the over-55s.
Taylor says: "Since launch, KRS has worked tirelessly to improve the level of financial advice available to those approaching or in retirement. We are excited about partnering with Phoenix, a firm with considerable experience of investing successfully in the retirement segment of financial services, to continue to build KRS into the trusted brand for the over 55s.”
Sandy Muirhead, a managing partner at Phoenix, says: "We believe KRS represents a highly attractive platform from which to develop a broader retirement services proposition. We have strong knowledge of this sector, by virtue of our highly successful previous investment in Partnership Assurance, which we created in 2005, and we look forward to working with the KRS management team to build another leading business in this sector.”