TMF Group ditches float as private equity firm CVC makes winning bid

Business outsourcer TMF Group, which declared its intention to float in London earlier this month, has ditched its initial public offering (IPO) to accept a winning bid from private equity firm CVC Capital.

TMF, which serves 60 per cent of companies listed on the FTSE 100, was put up for sale earlier this year by DH Private Equity (formerly Doughty Hanson). DH was running both an IPO exit process and a sale process, and seemed fairly certain that it would choose the public markets as a way to sell its stake.

But in a surprise turn of events, CVC came back with an offer which DH was unable to refuse. The firms have declined to comment on the price paid for TMF, but the float was rumoured to value the company at around £1bn.

“We are very proud to have supported TMF as it has developed into a truly global integrated services platform supporting multinational and local organisations,” said DH's senior partner Dick Hanson.

“In our time of ownership, we have worked closely with the company, supporting its acquisition strategy and helping to grow its revenues, profits, international footprint and employee base.”

Since DH acquired the company in 2008, TMF's revenue has grown by 148 per cent and its earnings before deductions by 131 per cent.

Following the sale, DH – which rebranded after the death of one of its founders and heads, Nigel Doughty, caused the firm to hit a stumbling block – will have just one company left to sell in its fifth fund.

For CVC, this will be the first investment from its record €16bn (£14.2bn) seventh fund which was raised earlier this year.

TMF provides accounting and tax, secretarial, compliance, human resources and payroll services worldwide.

It has made 14 acquisitions since 2014, and generated revenues of 2528.9m last year.

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