Madison Dearborn to buy NFP for $1.3 billion

Deal ends roller-coaster ride for wealth management aggregator.

Apr 15, 2013 @ 4:29 pm

By Dan Jamieson

Private-equity firm Madison Dearborn Partners LLC has agreed to buy National Financial Partners Corp. (NFP) for $1.3 billion, the companies said today.

The deal, which includes debt that can be converted into stock, works out to $25.35 a share. The sale, which is expected to close in the third quarter, is subject to the approval of NFP shareholders.

The transaction will end something of a roller coaster ride for NFP as a public company. The company went public at $23 a share in 2003, and at one point in 2008, the aggregator of insurance, corporate benefits and wealth management firms was trading for less than $1.

Meanwhile, Jessica Bibliowicz, the company's chief executive and daughter of financier Sandy Weill, who has led NFP since 1999, plans to step down next month.

NFP's board plans to appoint Douglas Hammond, NFP's president and chief operating officer, as the next CEO.

Observers said the transaction is another example of how private-equity firms increasingly are looking to take stakes in the wealth management industry.

Madison Dearborn is “one of the old-line [private-equity] firms that has grown over the years to quite significant size,” said Dan Seivert, CEO of Echelon Partners, a mergers-and-acquisitions firm.

“These public-to-private transactions are just one type of opportunity they look for,” he said. “It's almost like a relief package, to take a company out of the burden of being public, [which] can be an impediment to growth because you're looking to the next quarter instead of the long-term growth strategy.”

Madison Dearborn, based in Chicago, has raised six funds with more than $18 billion since it was founded in 1992.

Mr. Seivert said the firm isn't known as an active buyer of financial services companies, but it does have a stake in Nuveen Investments Inc.

NFP was launched in 2000 with the goal of acquiring registered investment adviser firms but has since done acquisitions of corporate-benefits and insurance firms, said David DeVoe, managing partner at DeVoe & Co., a consultant.

“The investment from a private-equity firm could potentially help [NFP] re-engage in that strategy” of buying wealth managers, Mr. DeVoe said this month when news emerged that Madison Dearborn was one of the final bidders for NFP.

NFP gets almost half its revenue and two-thirds of its profits from its corporate-client group, which provides employee benefit services to middle-market companies.

Last summer, NFP acquired Fusion Advisor Network, which has 240 advisers, bringing NFP's retail-wealth-management business to about 1,700 advisers.

(This article was supplemented with reporting from Bloomberg News.)


What do you think?

View comments

Recommended for you

Featured video


Regulators' gloves are coming off with cybersecurity. Put up your dukes with these tips

Updated guidelines and some of the first-ever rule enforcements signal that regulators are getting serious about holding firms accountable for data breaches, according to special projects editor Liz Skinner and technology reporter Ryan Neal.

Recommended Video

Keys to a successful deal

Latest news & opinion

Blackrock exposed data on 12,000 financial advisers

The data appeared in three spreadsheets, linked on one of the New York-based company's web pages dedicated to its iShares exchange-traded funds

Advisers throw cold water on FIRE movement

Millennials love it, advisers don't: Turns out, extreme early retirement is a suitable goal for almost nobody.

10 universities with the most billionaire alumni

These 10 American schools have the greatest number of alumni who are billionaires.

Top-performing ETFs of 2018

The markets took a beating last year, but these exchange-traded funds bucked the trend

Morningstar says investors rushed the exits in 2018

Net flows into mutual funds and ETFs were the lowest since the 2008 financial crisis, while money-market funds captured inflows.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print