Perpetual Wealth sale still alive as suitor Bain Capital keeps talking

An agreement for the sale of Perpetual’s wealth management could be reached by Christmas.

Market participants keenly watching developments with the Perpetual Wealth sale process expected a deal with suitor Bain Capital to have been reached by now.

But despite no transaction having been announced, sources say that the private equity firm is engaged and an agreement could be reached by Christmas.

The Boston-based Bain Capital was bought back into the tent after Perpetual ended talks with Oaktree Capital Management along with TA Associates.

But Bain was then offered exclusive due diligence.

The focus with previous asset sales by Perpetual has always been capital gains tax costs, but company sources have played down this as being a stumbling block for the sale of the private wealth unit.

Bilateral negotiations between the interests of Oaktree Capital Management and Perpetual to buy the business dragged on for weeks before they finally ended.

The unit had been expected to sell for between $500m and $1bn and was placed on the market after Perpetual called off a plan to sell its corporate trust and wealth management units to KKR for $2.2bn.

There were suggestions that Oaktree had made a structured offer, with the terms involving some payment upfront and some down the track subject to the company hitting various performance targets.

Another challenge with the transaction involved creating agreements with the wealth management advisers at the business in order to encourage them to stay.

Working on the sale of the Perpetual Wealth Management unit is investment bank Barrenjoey.

The sale will reduce Perpetual’s $740m-plus debt pile.

Perpetual provides a range of investment management, super and retirement income services to the retail, wholesale and institutional markets through its wealth-management arm.

For the year to June, the Perpetual Wealth Management unit generated $51.1m in underlying profit before tax, down from $54m in the previous corresponding year despite a lift in revenue, as expenses increased.