Non-public fairness agency Thomas H. Lee Companions not too long ago took Hightower off the market as a result of it didn’t get the worth it was searching for from potential patrons, in accordance with sources near the agency and the funding bankers concerned.
Citywire.com first reported that THL was pursuing a sale of its majority curiosity within the $130 billion RIA platform and that the personal fairness agency had pulled it again from the market.
A number of sources near the method say that THL couldn’t discover a purchaser keen to pay the a number of it wanted.
“What they had been searching for was a a number of that might’ve justified to their current LPs that this was a great funding that they might get a good return on it,” one supply stated.
Based on sources who declined to be named, THL interviewed no less than six personal fairness companies about the opportunity of shopping for Hightower, however solely two companies got here forth with gives. THL was seeking to get 13 to 16 instances EBITDA, roughly the identical vary Focus Monetary Companions bought when it went personal. These sources stated the gives had been within the vary of seven to 10 instances EBITDA. After in depth negotiations, one of many two companies provided 10 instances EBITDA, their final and last supply.
“That’s the explanation Hightower wound up not pursuing it additional,” one supply stated. “At this level, they’re type of in a troublesome spot. You possibly can look ahead to vital worker cuts that I believe at the moment are within the offing.”
THL is exploring headcount reductions on the residence workplace to enhance Hightower’s EBITDA in case it decides to go to market in one other 12 months or so, in accordance with sources.
Spokespeople for each THL and Hightower declined to remark.
In a March interview with Hightower CEO Bob Oros, he stated THL was not seeking to promote Hightower.
In April, Hightower named Gurinder Ahluwalia, the lead director of the agency’s board of administrators, president, a newly created place. Ahluwalia is an government accomplice in THL’s monetary expertise and providers vertical.
Final week, Meghan McCartan, who stepped into the highest advertising position at Hightower in 2021, left the corporate, in accordance with a LinkedIn publish. McCartan, who grew to become chief advertising officer at Hightower in July 2022, shared the “bittersweet replace” that she had departed the agency, saying she was not sure however enthusiastic about her subsequent alternative.
