US private equity firm ABRY Partners has taken a majority stake in Thomsons Online Benefits.
The employee benefits firm says ABRY will make “substantial funds” available to allow the company to make acquisitions and increase its UK presence. It says the investment values the company at close to £100m.
ABRY replaces existing investors Pi Capital and Westminster Growth Capital.
The remaining shares in the firm are held by Thomsons’ management team and staff, led by chief executive Michael Whitfield and managing director Chris Bruce. Thomsons refused to disclose the size of the stake held by ABRY, and the remaining stake held by Thomsons.
Whitfield says: “We conducted a robust selection process with multiple bidders from the UK, Europe and US, and ABRY emerged as the clear winner.
“Part of the investment will go into strengthening and developing our UK workforce. This will help us to support more UK businesses and their employees as they face major pension regulation changes.”
ABRY partner Brian St John says: “Thomsons has had a period of phenomenal growth and success within the last 12 months especially, seeing earnings almost trebling.
“We back Thomsons to dominate their space for many years to come and will also be looking for other opportunities in the UK and abroad in the near future.”
Syndaxi Chartered Financial Planners managing director Robert Reid says it will be interesting to see whether Thomsons continues to see earnings increase. He says: “Given Thomsons was previously heavily reliant on commission, it will be a challenge for their business model to adapt to charging clients fees.
“If the Government decides to ban consultancy charging as wel, it becomes increasingly difficult for Thomsons.”