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Advent International acquires Xafinity

Private equity firm Advent International has acquired Xafinity, a UK-based pension services and employee benefits group, from Duke Street.

The value of the transaction was undisclosed.

Xafinity provides pensions administration, payroll and consulting services for around 1,100 public sector entities and companies, covering 2.1 million pensioners. The company employs 1,400 people in 14 locations across the UK and is headquartered in Reading.

Xafinity was acquired by Duke Street in July 2005 and consists of three operating divisions: Xafinity Paymaster, a provider of pensions administration to the public and private sector; Xafinity Claybrook, a provider of pensions administration systems; and Xafinity Consulting, a pensions consultancy business.

Xafinity acquired Hazell Carr in 2008. For the year ended 31 March 2009, group income was GBP136m.

Jeff Paduch (pictured), director at Advent International who led the investment, says: “We have followed Xafinity closely for three years and feel that the timing is right for us to invest. We will continue to support the operational improvements that chief executive Tim Robinson and his team have implemented and look forward to supporting additional initiatives that will drive growth across Xafinity’s three divisions. Xafinity has an excellent reputation with its customers and we believe it provides a strong platform that is consistent with Advent’s focus on opportunities within the business process outsourcing sector.”

Tim Robinson, Xafinity’s chief executive, says: “We are excited by the prospect of having Advent International as our new backer and look forward to their support as we continue to harness the many opportunities for growth that this next phase of ownership will present.

“Advent’s experience in the broader financial services sector and their specific knowledge of business process outsourcing will be extremely valuable as we continue to build and shape our company for the future.”

Close Brothers was financial adviser to Advent International and Weil, Gotshal & Manges legal adviser.

James Craven, director at Close Brothers, adds: "This is an excellent investment for Advent. Xafinity is a well managed business which has flourished by helping its customers in the private and public sectors address key issues around pensions and employee benefits. Xafinity, under Advent’s stewardship, has huge opportunities for organic growth as well as further diversification within financial services."

Financing for the transaction was provided by a syndicate including Ares Management, Babson Capital, Bank of Ireland, Barclays, Calyon, Lloyds TSB Corporate Markets acquisition finance and Royal Bank of Scotland.

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