TPG Strikes $1 Billion Deal for Australian Outsourcing Firm Smartgroup

(Bloomberg) -- Australian employee benefits firm Smartgroup Corp. has struck a deal with a consortium that includes private equity giant TPG Capital for a potential buyout that could value the company at more than A$1.38 billion ($1 billion).

TPG, alongside Australian private equity firm Potentia Capital and pension fund Aware Super, has offered A$10.35 cash per share, a 32% premium to Tuesday’s closing price, Sydney-based Smartgroup said in a statement Wednesday. 

The board intends to recommend shareholders accept an offer if a binding bid is made after four weeks of due diligence. 

The deal would take the company private at a time when it has lagged the broader Australian index, down from a high of A$12.83 in August 2018. The company named a new chief financial officer in May after being removed from the S&P/ASX 200 index in March. 

Smartgroup offers a suite of outsourced administration tasks for employee management, including payroll services, fleet management, share plan administration and more, according to its website. It first listed in July 2014 at $1.60 per share.

Smartgroup has appointed Macquarie Capital as its financial adviser and Herbert Smith Freehills as its legal adviser, it said.

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