Warburg Pincus has won the auction for Stone Point Capital-backed Kestra Financial Inc, three sources said.
The New York private equity firm beat out Reverence Capital Partners to win Kestra, the people said. The transaction values the company at $830 million to $850 million, one of the sources said.
Established in 1997, Kestra is an independent broker-dealer with about 1,800 registered representatives. The Austin company had $76 billion in assets under advisement in 2017 and $24 billion of AUM. Total revenue that year was $475 million.
Stone Point put Kestra up for sale in late 2018, people said. Goldman Sachs advised on the process.
The auction hit the second round in January with final bids due on Valentine’s Day, sources said. Warburg and Reverence ran “neck and neck” in the process, the person said. “The seller decided to go with a higher price,” the source said.
Kestra is a less than three-year hold for Stone Point, which acquired the company in 2016 from NFP Corp. NFP, a portfolio company of Madison Dearborn Partners, retained a minority stake in Kestra.
Reverence, of New York, is a financial services-focused PE firm. The buyout shop recently raised $1 billion for its second fund, sources said. Since that time, the firm has become more focused on buying control of companies on its own.
Reverence was part of a group, including Apollo Global Management and Crestview Partners, that acquired the annuities business of Voya Financial Inc last year. Victory Capital, an asset management firm backed by Crestview and Reverence, went public in February 2018.
Warburg has been fundraising for its latest flagship and collected about $14 billion in November, Bloomberg reported. The firm could raise as much as $17 billion for the fund, the story said. Warburg focuses on sectors including healthcare and commerce, energy, financial services as well as TMT. Warburg’s financial services investments include Ant Financial, Varo Money and Sagent Lending Technologies.
Executives for Goldman and Warburg Pincus declined comment. Stone Point, Kestra and NFP could not be reached for comment.
Action Item: For more information see the Kestra website here.