Private equity firm backs Azets to become co-owner

Professional services firm Azets has secured investment from a private equity firm, which now holds an equal and co-controlling stake in the business.

Private equity firm PAI Partners has backed the firm, which supports more than 93,000 clients with business-critical accounting, tax, payroll, audit and advisory services and generates revenues of around £700m.

It will co-own Azets alongside Hg, the manager of HgCapital Trust and an investor in software and business services, which formed the business six years ago to digitalise financial compliance processes for SMEs.

The transaction values HgCapital Trust’s share of Hg’s overall investment in Azets at £54.3m.

Both Hg and PAI have a record of partnering with management teams to rapidly scale businesses and create industry leaders.

With this support, Azets says it is well placed to continue its growth strategy, “deepening its presence in new and existing markets across Europe through a combination of organic growth and further strategic M&A”.

Chris Horne, group CEO at Azets said: “Azets has established a strong reputation for delivering innovative tech enabled services in what has previously been a low-tech adoption sector.

“Our five-year Pathway strategy outlines a clear purpose and vision of how we want our business to develop, and we are thrilled to have selected two investors who are as excited about our future as we are.

“To gain backing from another world-class investor is testament to this evolution and will enable us to deliver on future opportunities that will help us scale and support our thousands of clients and colleagues globally.”

Colm O’Sullivan, a Partner at PAI Partners, said: “With its proven and resilient business model, Azets provides a strong platform for future growth. Thanks to its leading market positioning, the firm is well placed to benefit from the growing levels of compliance, regulation and outsourcing that underpin its core services market”.

Matthew Brockman, managing Partner at Hg, said: “From the original vision, we have built a world-class company using our deep knowledge of this sector and considerable operational capabilities in building software and services companies.

“This transaction allows us to return significant capital to our investors, a huge priority for us in the last year, while bringing on substantial new expertise from a strong partner and retaining a substantial interest in the next leg of growth for Azets.”

Completion is subject to customary regulatory approvals.

Hg and Azets management were advised by JP Morgan as lead adviser, Jefferies, Alpha Advisory, Skadden, EY, Deloitte and OC&C.

PAI Partners was advised by Deutsche Bank, Freshfields, KPMG, Alvarez & Marsal and Bain & Company.