TMF

TMF is a global independent provider of management and administrative services that has grown exponentially as a result of a raft of new regulation globally.

Today the business has over 7,000 employees with operations in more than 80 countries across Europe, the Americas, Asia, Africa and the Middle East. Its main services include book keeping and reporting; domiciliary and management services; human resources and payroll; structured finance and fund administration.

Our investment

We have a long track record of helping our partner companies build scale and enhance their strategic value through buy and build.

In 2003, we identified the wider trust and fiduciary services sector as an area of particular interest from a buy and build perspective. It benefitted from strong fundamentals and we saw several factors at work that we believed would put significant pressure on the industry as a whole to consolidate.

TMF was the third business in the sector that we took a close look at. With a strong service offering, high quality corporate client base and attractive international network, we felt the business had the potential to become a strong consolidation platform.

Value creation

The transaction took almost a year to complete, with a number of complexities mainly relating to the highly regulated environment in which the business operates. We worked closely with management during this period to tackle these challenges and complete the transaction.

Our initial focus was to build the board and ensure the financial information, controls and internal resources within the business were of the highest quality and able to deal with a potentially significant increase in the size and complexity of the business.

We soon appointed a new chairman and chief financial officer. The new CFO strengthened the second tier finance and control functions and established a strong internal due diligence and integration team.

Meanwhile, we divested complex non-core financial service companies to allow management time to focus on the high-growth core business.

TMF commenced an aggressive buy and build strategy. The business completed more than 50 acquisitions, including key acquisitions from the big four accounting firms in South and Central America, and Asia, creating first mover advantage for TMF in these important high-growth regions.

In addition to the initial €15m acquisition facility, we helped the company raise about €50m of senior and payment in kind debt facilities to support the buy and build programme.

During our investment, TMF increased its geographic footprint from 23 to 60 countries and employees from 900 to more than 2,300. TMF emerged as a leader in outsourced management and accounting services on a global scale, with double-digit organic growth rates and a consistent focus on quality of service.

Outcome

We completed the sale of the business to private equity firm Doughty Hanson and management in October 2008 for €750m. We achieved a 6.2x money multiple and an IRR of 56%.

The investment won France and Benelux Deal of the Year at the European Private Equity Awards.

Sector

Services

Location

Benelux

Investment date

2004

Exit date

2008

Deal size (exit)

€750m

Fund

Mid-market fund

Status

Realised

Website

tmf-group.com

Strategy

Key facts

80+

countries

7,000+

staff

56%

IRR

6.2x

return

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