Clearwater advises management in £115 million IT deal

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1st – The Exchange, a leading provider of technology and e-commerce solutions to the financial services sector, has undergone a buy-out from parent company Vertex. The £115m deal was backed by Lloyds Development Capital (LDC).

Clearwater Corporate Finance advised the management team, which is led by managing director David Child and includes directors Paul Yates and Kevin Budge. LDC invested £42m to acquire a controlling stake in the company from Vertex, the UK’s second largest provider of outsourced business services and technology solutions. Vertex will retain a significant share in the business.

1st – The Exchange provides a market-leading integrated suite of technology solutions, software and consultancy to the financial services industry throughout the UK. Based in Cheltenham, Warwick and Woking it supports the key stages of a distributor’s business process, whatever its size, and enables users to service their clients more efficiently and profitably whilst meeting regulatory demands, reducing costs and maximising profits.

The company develops software for financial planning, client management and full back office administration to more than 1,600 adviser firms. It is the largest provider of online comparative quotations and electronic new business applications to the financial services sector with approximately 27,000 registered users.

Alastair Hazell has been appointed as chairman of the board along with non-executive directors, Ben Gunn and Ivan Martin. Hazell was group managing director for Thomson Financial Europe, Gunn recently retired from running Friends Provident and Martin is executive chairman of Sesame Group, the UK’s largest IFA network.

Jon Hustler of Clearwater’s Birmingham office said: “1st – The Exchange occupies a market-leading position in the financial services sector and has huge potential for further growth. The deal, which also provides funding to fuel rapid expansion, should allow the business to realise its full potential.”

“It also highlights the continuing attraction of IT companies for private equity investors.”