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Lloyds buys 1st-The Exchange

Lloyds TSB Development Capital has bought a majority stake in 1st-The Exchange in a £115m deal.

The private equity arm of Lloyds Banking Group has invested £42m for a majority stake in the firm. Vertex will retain a significant share in the business.

Managing director David Child will continue to lead the team alongside strategy and business development director Paul Yates and finance and operations director Kevin Budge. Sesame Group executive chairman Ivan Martin and former Friends Provident chief executive Ben Gunn are appointed non-executive directors while ex-Thomson Financial Europe managing director Alastair Hazell will be chairman.

1st-The Exchange says the deal is the biggest UK institutional buyout by private equity this year.

Child says: “We now have an incredibly strong investment foundation to support and accelerate our future plans.”

LDC director Daniel Sasaki says: “By combining our specialist experience with the existing proposition, we can help to support the growth of 1st- The Exchange.”

In May 2005, Vertex bought The Exchange’s parent company Marlborough Stirling for £95.3m. In February 2006, Vertex acquired back-office software provider 1st for £25m plus up to £13.5m depending on performance. In January 2007, Vertex was sold to a consortium of American private equity firms for £217.5m. Earlier this month, Vertex appointed IBM Financial Services global managing director Paul Sweeny as its new chief executive.

LDC has recently completed a management buyout of JP Morgan Invest, the flexible savings platform and wealth advice service for employees.

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