Permira bets $835m on corporate services in Asia

European private equity firm Permira has made its first investment in the corporate services sector in Asia with its acquisition of Hong Kong-based Tricor Holdings.

Private equity heavyweight Permira has acquired Tricor Holdings from the Bank of East Asia (BEA) and NWS Holdings for HK$6.5 billion ($835 million; €744 million), the firm said in statement.

Tricor is a non-core asset of BEA which offers back office services such as payroll, accounting, and payment administration to corporates around the world including Robeco, Toshiba, Houlihan Lokey, and Barclays Capital.

The BEA owns a 75.6 percent stake in Tricor and fellow shareholder NWS Holdings, the infrastructure and services branch of New World Development, owns the rest. Once the transaction is completed in 2017, BEA will no longer hold any equity interest in Tricor and will cease to be a subsidiary of the bank.

Private equity firm Carlyle, Baring Private Equity Asia-backed trust and custodial services provider Vistra Group, Ping An Insurance Group of China, and Australian registry operator Link Market Services, which was previously owned by Pacific Equity Partners, are said to be among those who placed bids for the business.

Robin Bell-Jones, a partner at Permira in Hong Kong told Private Equity International that Tricor is a “rare opportunity and a rare asset” and that the firm has been looking for the right investment in the corporate services market for two to three years.

“It’s been a well contested process, a testament to the quality of the business and the rarity of the deal opportunity,” he added.

Permira’s investment in Tricor is its first in the corporate services market in Asia. With its stake in Tricor, the firm intends to draw from its global experience in investments in financial and professional services. Among Permira’s holdings in the sector are Glendale-based online legal services provider LegalZoom, UK financial planning group BestInvest, and more recently, German payroll provider P&I.

According to Bell-Jones, the firm sees continued growth in Asian corporate services driven by strong foreign direct investments and rapid growth in Asian companies.

“The rise in foreign direct investment means there is strong growth in overseas companies setting up in the region. Along with fast-growing Asian companies and the increasing complexity of global regulations, there will be more demand for corporate services.”

“Tricor has many avenues to expand organically and is an excellent platform for further consolidating the sector via M&A in what remains a very fragmented market.

Permira has over €31 billion in committed capital with about $3 billion invested across Asia. The firm is currently investing two funds – €5.3 billion 2014-vintage Permira V, which is almost 80 percent invested and Permira VI, which held a first close on €6.3 billion in July this year, against a €6.5 billion target.