PE firm GTCR to buy wealth management platform AssetMark for $2.7 billion

By Niket Nishant

(Reuters) -Private equity firm GTCR has agreed to pay $2.7 billion to buy AssetMark Financial, in a deal that would take the wealth management platform private more than five years after its initial public offering.

The acquisition, announced on Thursday, will help expand GTCR's footprint in the financial services industry. Founded in 1980, the firm manages $40 billion of equity and is a big player in the healthcare, financial and technology markets.

It had also bought payments technology provider Fidelity National Information Services' Worldpay business in a blockbuster deal last year.

AssetMark's shareholders will get $35.25 per share in cash, and the deal will be financed with a credit facility and capital from funds affiliated with GTCR.

AssetMark's shares closed down nearly 3%. GTCR's offer price represents a 1% premium to the stock's last close, but is more than 30% higher than where it was trading at before media reports on a potential stake sale of the business.

"The offer feels somewhat low to us for a company with a leading position in the wealthtech market," William Blair analysts wrote in a note.

"However, reports of a potential deal were reported by Bloomberg in December, which suggests that if there were other potential buyers at a higher price, they likely would have emerged by now."

Concord, California-based AssetMark provides technology for financial advisers to manage client investment portfolios and report and analyze their performance.

Morgan Stanley was the financial adviser to AssetMark for the transaction. UBS Investment Bank and Barclays served as co-lead financial advisers for GTCR and are providing debt for the deal, which is expected to close in the fourth quarter this year.

(Reporting by Niket Nishant in Bengaluru; Editing by Eileen Soreng, Shounak Dasgupta and Jonathan Oatis)