Permira to Acquire Corporate Services Firm JTC for £2.3 Billion

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(Bloomberg) — Private equity firm Permira agreed to acquire JTC Plc, the London-listed provider of fund solutions and corporate services, for £2.3 billion ($3 billion).

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Permira is offering 1,340 pence cash per JTC share, according to a statement Monday. That represents a 37% premium to JTC’s closing price on Aug. 28, the last full trading day before Bloomberg News first revealed the takeover interest. It’s slightly less than Friday’s closing price of 1,358 pence per share, after a runup in JTC shares as a bidding war intensified. 

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The board of JTC plans to unanimously recommend the bid to shareholders. The Permira-led consortium, which also includes Canada Pension Plan Investment Board, beat out rival proposals from Warburg Pincus, it said in the statement. The Financial Times and Bloomberg reported late Sunday that Permira was nearing a deal. 

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JTC said in the statement that its low trading multiples, as well as the process of raising new equity in London and limited capacity to take on additional debt, put it at a disadvantage in competitive bidding situations as it seeks growth through acquisitions. It also cited the need for investments in artificial intelligence. 

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While the JTC board believes the company is “well-positioned to make continued progress as an independent company,” the terms of the deal “recognize the value of JTC’s business” and provide shareholders with an immediate cash realization. The sale to Permira is expected to deliver more risk-adjusted near-term value to JTC shareholders than the company’s standalone prospects over the medium term, it said. 

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Jersey-based JTC provides fund administration, compliance and investor reporting for clients in private equity, real estate and venture capital among others. The company has 38 offices globally with about 2,300 employees. In July, JTC completed the acquisition of Citigroup Inc.’s global fiduciary and trust administration business, formerly known as Citi Trust.

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“JTC will be able to leverage new financial flexibility to compete successfully with other privately-held acquirers in the accelerating consolidation of the industry,” JTC Non-Executive Chairman Mike Liston said in the statement. 

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While competing take-private bids by buyout firms are relatively uncommon in the UK, JTC is the second major target of the sort this year after KKR & Co. trumped Advent to buy British precision testing company Spectris Plc for £4.2 billion in August. This shows how relatively cheaper valuations in the UK are drawing renewed interest from private equity funds.

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Permira in 2017 invested in Alter Domus, a Luxembourg-based provider of fund administration services to the alternative investment industry, and helped grow it into one of the industry’s biggest players. Last year, Permira sold about half of its stake in the business to rival private equity firm Cinven. 

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Deutsche Numis and Robert W. Baird & Co. acted as lead financial advisers to JTC on the deal, with Berenberg also providing advice.

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—With assistance from Dinesh Nair and Swetha Gopinath.

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