Zellis launches GBP 2bn auction with lender education to start imminently
Bain Capital has launched the GBP 2bn sale of Zellis Group, as private-credit providers prepare to take a closer look at the HR and payroll software specialist through lender-education sessions, four sources familiar with the situation said.
Sellside advisors Morgan Stanley and Evercore began distributing information memoranda for the sale of the UK-headquartered firm to prospective bidders in recent days, according to the first and a fifth source familiar. Zellis is expected to be marketed off EBITDA of GBP 70m-plus, as reported, and could fetch an enterprise value of GBP 2bn.
Meanwhile, Morgan Stanley and Evercore will jointly orchestrate management presentations for prospective lenders in the coming weeks, the first four sources said.
Fireside conversations have been ongoing with prospective bidders since last year with a mix of European and US sponsors, according to the fifth source, as well as a sixth and seventh familiar. Several strategic suitors have also been approached to partake in the process, the sixth source added.
SMBC, an incumbent lender to Zellis since Bain Capital’s 2018 leveraged buyout, in December announced it had served as global coordinator and sole physical book runner on an amend-and-extend of its term loan and RCF in a GBP 405m transaction. The upsized facility priced at Sonia+ 575bps, with an OID of 97.5, as reported.
Zellis reported revenues of GBP 201.4m and EBITDA of GBP 69.2m for the year ending on 30 April 2022, up from GBP 175.4m and GBP 57.4m in FY22, respectively, according to its most up-to-date public filings.
Zellis provides human resources and payroll software as well as other outsourcing services. The group comprises Zellis, an operator on payroll and core HR software and services for businesses with more than 1,000 employees; Moorepay, which provides payroll plus HCM software and services for small and midsize businesses; and Benefex, a software provider for employee benefits, recognition, and communications.
Representatives for Bain Capital, Morgan Stanley and Zellis declined to comment. Evercore declined to comment.