CVC, Nordic Capital & Platinum Ivy to acquire Hargreaves Lansdown for £5.4bn

Aug 16, 2024 | News | 0 comments

A consortium of private equity firms comprising CVC Capital Partners, Nordic Capital and Platinum Ivy, are to acquire Hargreaves Lansdown in a deal that values the UK’s largest savings and investment platform at £5.4bn ($6.9bn), according to a report by Bloomberg. 

The private equity firms have secured the unanimous support of Hargreaves Lansdown’s board, which has recommended that shareholders accept the offer. According to a statement released on Friday, the purchase price of 1,140 pence per share includes a 30 pence payment for the 2024 final dividend and represents a 54.1% premium over the company’s closing share price on 11 April, prior to the consortium’s initial approach.

Following the announcement, Hargreaves Lansdown’s shares increased by up to 2.6% during early trading in London.

The acquisition represents one of the latest high-profile departures from the London Stock Exchange this year, following transactions involving Britvic, International Distribution Services and Darktrace.

Hargreaves Lansdown, which now serves nearly 1.9m customers and manages assets totaling £155bn, was founded in 1981 by Peter Hargreaves and Stephen Lansdown. The company faces growing competition from rivals such as AJ Bell and Interactive Investor, which have been gaining market share with more competitive fee structures.

Both the company’s founders, who collectively own about 25%, have agreed to support the acquisition. Peter Hargreaves plans to reinvest half of his 19.8% stake in the private entity, retaining a significant interest, while Stephen Lansdown intends to sell his entire 5.7% stake.

Hargreaves is expected to retain a stake valued at £535m, while Lansdown is set to receive approximately £309m from the sale.

The acquisition will be partly financed through a £1.75bn interim senior term loan facility provided by undisclosed third-party lenders. Bloomberg’s sources indicate that private credit funds managed by Apollo Global Management and KKR & Co are among those supplying the loan.

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In a statement on the LSE, Pev Hooper, Managing Partner at CVC Private Equity Group, Emil Anderson, Partner at Nordic Capital Advisors and Hamad Shahwan Aldhaheri, Executive Director of the Private Equities Department at ADIA, commented: “HL has an important purpose: to make it easy for people to save and invest for a better future. Over the 40 years since it was founded, HL has built a strong, trusted brand, underpinned by high levels of customer loyalty and advocacy. As a consortium, we are aligned with management that, despite these strengths, the company now requires substantial investment in an extensive technology-led transformation to improve HL’s proposition and resilience, and to drive the next phase of HL’s growth and development.”

CVC is being advised by Latham & Watkins. Platinum Ivy is being advised by Linklaters. Bidco and Nordic Capital are being advised by Kirkland & Ellis International. Hargreaves Lansdown is being advised by Freshfields Bruckhaus Deringer

Source: Private Equity Wire

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