Permira to buy Duff & Phelps for $1.75bn

January 2018 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

January 2018 Issue

European private equity group Permira is to acquire global valuation and corporate finance advisory firm Duff & Phelps in a deal worth $1.75bn.

Under the terms of the deal, a company backed by Permira will acquire Duff & Phelps from The Carlyle Group, Neuberger Berman, the University of California’s Office of the Chief Investment Officer of the Regents and Pictet & Cie. The investment for the acquisition will come from Permira’s sixth fund and financing is being provided by UBS. The deal, which is Permira’s first financial services investment in the US, is expected to close in the first quarter of 2018, pending the customary closing conditions.

Duff & Phelps, which advises clients on a range of strategic and complex business challenges in the areas of valuation, corporate finance, disputes and investigations, compliance and regulatory matters, as well as other governance-related issues, has approximately 2000 client service professionals located throughout offices in the Americas, Europe and Asia. Under the terms of the proposed acquisition, Duff & Phelps’ management team will retain a significant equity stake in the firm and will continue to lead the company in their current roles.

Noah Gottdiener, chief executive of Duff & Phelps, said, “This transaction affirms that Duff & Phelps has built a global and diversified franchise that helps clients protect and enhance their value. As we continue to execute on growth opportunities, we are confident that our clients and employees alike will benefit from this partnership with Permira – a firm with an outstanding track record of providing strategic support, as well as sector expertise, to its funds’ portfolio investments. Our clients are entering new markets and facing new opportunities and challenges every day, so we are excited to have the backing of the Permira funds as we continue to expand our range of services and global footprint, particularly in Europe and Asia.”

Mr Gottdiener added, “We are grateful to the Carlyle team in addition to University of California, Neuberger Berman and Pictet for their support and guidance. They have played an integral role in helping us to execute our growth strategy.”

“Companies of all sizes and across all industries demand sound, objective and independent counsel to help them execute their most important business decisions – a demand that has grown exponentially since the financial crisis,” said Nic Volpi, partner at Permira. “Duff & Phelps is uniquely positioned to meet this demand as one of the only firms offering a full suite of advisory and consulting services with deep client relationships, meaningful scale and brand strength. We have great respect for Duff & Phelps’ cohesive culture and its team of professionals whose depth of knowledge, impartial judgement and technical expertise have made the firm a global leader. We are very excited to support Duff & Phelps’ proven management team as it continues to deliver operational excellence for its clients.”

John Redett, managing director and co-head of the Carlyle global financial services sector team, said, “We wish Noah and his team all the best as they continue to execute upon their strategic vision and business plan and are thankful to have played a part in their success. During our four-and-a-half-year partnership, we more than doubled EBITDA and positioned the company for long-term success. We firmly believe in Duff & Phelps’ business model, the strategic value they deliver to clients and their ability to continue capitalising upon the vast opportunity ahead.”

The acquisition of Duff & Phelps marks the Permira funds’ eighth investment in the financial services industry, totalling over $3.8bn of equity invested.

Duff & Phelps’ ownership has changed hands on a number of occasions since it was founded in 1932. The firm was acquired in a private equity deal in 1989 as part of a management buyout backed by Freeman Spogli & Co. The company went public in 1992 before being taken private in 2004. In 2007, the company went public again before being bought out in 2012 for $665.5m.

Richard Summerfield