Graphite books 3.5x return on recruiter

The sale of Alexander Mann Solutions to US-based firm New Mountain Capital comes just a month after Graphite raised £500m for its eighth buyout fund.

Graphite Capital, a UK-based mid-market firm, has sold Alexander Mann Solutions (AMS), a recruitment process outsourcing company, to US-based New Mountain Capital for £260 million (€304 million, $416 million). 

The sale, which still needs to be approved by EU competition authorities, will generate a 3.5x return for Graphite, according to a statement. 

AMS focuses on talent acquisition and management services in the recruitment space. It covers initial hiring, career management and redeployment.  

Graphite bought the company in 2007 from Advent International for £100 million, using its £475 million Graphite Capital Partners VII, a 2007-vintage. Shortly afterwards, Graphite supported the add-on acquisition of Capital Consulting. 

Under Graphite’s ownership, AMS increased its range of services, refined its business model and expanded its global reach. Its net fee income doubled to nearly £100 million in 2012, while staff numbers have grown from 900 to nearly 2000. AMS’ client base has also grown during Graphite’s ownership: it includes Rolls Royce, Deloitte, Barclays, Credit Suisse, Microsoft and Vodafone. 

Graphite, which typically invests in businesses with an enterprise value of between £25 million and £150 million, has invested in the recruitment sector before. Last October, it sold NES Global Talent, an international recruiter group, to AEA Investors for £234 million. It had bought the company in 2006 for £70 million. In July 2010, Graphite also acquired a £45 million stake in Teaching Personnel, a teaching staff provider business in the UK. 

Robert W. Baird, a mid-market investment bank, acted as investment banking adviser to Graphite on the sale of the company. Baird also advised Advent on the £100m sale of AMS to Graphite in 2007. 

The divestment of Alexander Mann comes shortly after Graphite wrapped up fundraising for its latest fund, Graphite Capital Partners VIII, which closed on £500 million last month. The firm reached its £475 million target after just seven months in market and without using a placement agent.  After the fundraising, Graphite accepted capital from a couple of LPs who were not able to meet the deadline for this close, taking the fund size to £500 million. 

New Mountain Capital, based in New York, manages private equity, public equity and credit capital according to its website. The firm, which has over $10 billion in assets under management, is currently targeting $3 billion for its latest buyout fund, New Mountain Partners IV, according to PEI’s Research & Analytics division