Iress Limited (ASX:IRE) reportedly attracts new buyout interest from TA Associates. The Boston-based private -equity fund is known to Iress and previously held discussions about potential deals. Some think it is a logical contender to buy the company and may once again be looking.
The $1.65 billion Australian-listed Iress told the market on October 17 that it was engaging with new third parties in addition to those that had previously expressed interest about a buyout that could be recommended by the board. A virtual data room was open to several additional parties under appropriate confidentiality agreements. The initial suitors looking are known as Thoma Bravo and Blackstone, with the latter earlier thought to be the most likely buyer of the business.
But Blackstone and Iress could not agree a deal, because the New York-based buyout fund wanted exclusive due diligence, something the target's board was not prepared to offer. The contest has widened to include other parties in the mix under the guidance of investment bank Barrenjoey as well as Goldman Sachs. This time around, bidders are restricted from contacting certain former management members without Iress consent.
That probably relates to the former Iress boss Marcus Price, who recently left the business and would be breaching terms of his contract with any discussion. TA Associates has been looking at a lot of opportunities in Australia for acquisitions and, should one of them be Iress, it would come after it recently returned to the negotiating table over a deal to buy the Perpetual Wealth Management. The Australian-listed Perpetual could not agree a deal with the Oaktree Capital Management-backed AZ NGA and invited other suitors back in the door.
Now Bain Capital, which had also earlier been looking at Perpetual Wealth Management, is in exclusive talks to buy the Perpetual unit. Sources say it is working hard on completing a deal. It had earlier been linked to Iress as one of the new suitors, but may now pass on the opportunity given its Perpetual focus.
The other new suitor in the Iress data room is Australian private equity firm Potentia Capital. There would be synergies for TA Associates to buy Iress, as it owns the second-largest wealth firm in the US called Orion, as well as a major stake of Kiwi wealth manager Craigs. Iress has met with Orion in the past exploring opportunities and synergies.
Another source said 96% of the TA Associates wealth management advisers used Iress. A deal could support the cost of Iress product development, with the service paid for and used by more advisers working throughout TA Associates' entities.
