Funds managed by Cornerstone Partners and funds managed by Oaktree Capital Management are to acquire Polish transfer agent and business processing outsourcing specialist ProService Agent Transferowy (ProService).
The agreement for purchase of 100 per cent stake in ProService Agent Transferowy was concluded on 23 February 2016. The company will be acquired by a partnership of Cornerstone Partners and Oaktree’s European Principal Group from private equity firm Highlander Partners. The transaction requires consent of Polish competition authority (UOKiK).
ProService Agent Transferowy is a specialised provider of professional support services of transfer agency, accounting, as well as advanced IT solutions for financial institutions domiciled in Poland and abroad. It has operated on the market for more than 20 years.
PaweÅ‚ Sujecki, CEO of ProService, says: “Our mission is to deliver end-to-end business solutions for the financial industry, tailored to the specific needs of our clients. We value very much the cooperation with our clients, and we will work on further strengthening and expanding of offer for our existing clients. We believe that together with new investors we will expand our presence, capabilities and expertise beyond the borders of Poland. Now it is time for a new chapter in our history.”
At the end of 2015, the company served 52 domestic and international clients and a portfolio of PLN 55 billion of assets under administration. The domestic market on which ProService operates is estimated at PLN 680m as of 2015.
ProService has a headcount of 350 people, including IT specialists, accounting, as well as clearing and settlement advisors.
Artur Dżagarow, Chairman of the Supervisory Board of ProService and Operating Partner at Highlander Partners, adds: “Within the last three years we have managed, together with the ProService team, to transform the company from being a service centre subsidiary of an important asset manager to an independent service provider, that is currently not only the leader in transfer agency services in Poland, but also a superb fintech platform ready to expand its services for the whole financial industry. We are very satisfied with our investment into ProService, in particular with the value created through extension of our service offer, entering into new business segments as well as building a corporate culture that promotes high commitment of employees together with high efficiency and security of operating processes. We hope that as a result of this transaction, ProService will start a new phase of its growth: international expansion.”
Outsourcing and offshoring (O&O) is a rapidly developing business in Poland, and around the globe.
Jacek Levernes, President of ABSL (The Association of Business Service Leaders) and advisor to Cornerstone Partners and Oaktree on the transaction, says: “Poland is the international business service sector leader both in Europe and worldwide. The business service industry in Poland already employs 170,000 FTEs and continues to grow at a rate of 15 per cent per year. The key for the continued growth of this industry in our country is the development and growth of advanced and knowledge based services, exactly as the ones ProService provides.”
Maciej Dyjas, Managing Partner at Cornerstone Partners, adds: “A new strategy for the acquired company will be based on organic growth of operational processes for mutual funds, further penetration of insurance outsourcing services as well as continued market consolidation in Poland and selected Western European countries. This is a first step in growing a specialised outsourcing platform dedicated to banking, insurance and asset management clients in CEE and select Western European countries. We believe that ProService with a new, solid investor will be a partner of first choice for financial clients.”
PrzemysÅ‚aw Krych, a founder and Managing Partner at Cornerstone Partners, says: “International clients could benefit from the trend of offshoring parts of technological, operational and administrative processes, that are not a strategic core functions to service providers in Poland. It is an opportune time in the industry for a well-capitalised and experienced team to provide business processes outsourcing. We have observed this trend in our other investments, Griffin Real Estate and Echo Investment, where we are one of the largest providers of real estate to BPO companies.”
The acquisition of ProService is the first joint transaction of Cornerstone Partners and Oaktree’s European Principal Group in Poland. Cornerstone is an exclusive partner of Oaktree’s European Principal Group in sourcing, executing and supporting equity transactions in Poland and other CEE countries.
“We are pleased with our partnership with Cornerstone Partners, which brings together global investing experience, local perspective and a best in class management team. They are uniquely positioned to contribute deep strategic expertise as we have already seen from our long term relationship with them through Griffin Real Estate. Our first private equity deal together is a logical continuation of the long term partnership we have already created,” says Karim Khairallah, a Managing Director of Oaktree’s European Principal Group.
The partnership between Cornerstone Partners and Oaktree’s European Principal Group invests in private equity transactions in Poland and CEE, with a focus on backing strong management teams to grow and transform their businesses.