Adamantem Capital snaps up Mason Stevens for about $200m

Adamantem Capital has bought Mason Stevens.

Sydney-based private equity firm Adamantem Capital has emerged as one of the mystery suitors for Mason Stevens, snapping up the funds administration company for about $200m.

It comes after Mason Stevens was earlier earmarked for an initial public offering, and DataRoom reported on November 26 it was looking likely to be off the agenda with a mysterious suitor circling.

There were suggestions at the time an overseas group was looking, and now it’s understood this group was the underbidder to Adamantem.

Mason Stevens was one of the IPO candidates heading to market last year through Barrenjoey and Morgans, but it pulled the deal when equity investors would not meet its price expectations.

At the time it was being valued at between $200m and $500m.

Mason Stevens is compared to fund administration businesses such as HUB24 or Netwealth, which trade at as much as 20 times earnings.

It offers investment administration and managed account solutions across multi-assets and multi-currencies, and such groups are successful due to their technology enabling a lower cost base.

The group, which has more than 70 staff working nationally, boasts superior platform technology for financial advisers, offering global investments, investment solutions and insight into investment options.

Former Iress chief executive Andrew Walsh is chairman and former UBS and Westpac executive Tim Yule is chief executive.

Mr Yule joined the company in 2015 and took on the top job in 2022.

Mason Stevens is owned by its staff and clients, with about 100 individual shareholders.

Founders hold the largest interests.

It is understood the group is profitable, and part of the logic for a listing was accessing more capital as it looked to fund expansion.

Earlier, Australian peers shied away from an acquisition because the asking price was too high.

One factor thought to have lead Mason Stevens to lean more towards a sale than a float has been that the markets still seem to be challenging for smaller groups looking to list.

Last month, civil construction firm Symal opened flat on its market debut, while shares in payments infrastructure company Cuscal dropped 8 per cent on their first day of trade before staging somewhat of a comeback.

And, the $2bn-plus HMC Capital float DigiCo REIT was down 14 per cent on its first two days of trade in the past week.

The deal comes after Adamantem Capital bid $144m for circular economy company Close the Loop after this year acquiring intellectual property company Qantm for about $250m.

It also made a play for New Zealand-listed department store company The Warehouse this year in a deal spearheaded by the retailer’s founder Stephen Tindall, although it was rejected by the listed company’s board.

Adamantem is also selling businesses.

Lazard was hired to sell its laundries business Linen Services Australia and has been selling New Zealand small goods business Hellers, advised by Luminis Partners.

And, its electrical business Legend is slated for a listing next year.

Adamantem’s business Plena, which is part of its business Zenitas Healthcare, is also for sale for about $100m.