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Genstar, Aquiline Mull Sale of Retirement Plan Administrator Ascensus

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Genstar Capital and Aquiline Capital Partners are weighing a sale of retirement and college-savings provider Ascensus Inc., which could fetch more than $2 billion, according to people familiar with the matter.

The private equity firms have spoken to financial advisors about seeking potential suitors for Ascensus, which generates about $150 million in annual earnings before interest, taxes, depreciation and amortization, said one of the people, who asked to not be identified because the matter isn’t public.

(Related: DOL to Help MetLife and Brighthouse Shut Down Abandoned Plans)

The firms are in the early stage of exploring an exit and may not formally solicit offers until late summer, they said. No decision has been made and they could also opt to hold onto the company.

Representatives for Aquiline and Genstar declined to comment. Ascensus said in an emailed statement that the company is focused on serving its clients and is positioned for future success as a result of its technology platform, industry expertise and service model.

“We are not surprised that this has created opportunities for people to talk about Ascensus as a great investment opportunity,” according to the statement.

Eager Buyers

Private equity firms have been eager to buy retirement services providers, which are often ripe for technological innovation and poised to benefit from an aging population. The industry is also dense with small players, creating an opportunity to grow through acquisitions.

Hellman & Friedman agreed to pay $3 billion in April for Financial Engines Inc., an investment manager that helps companies offer retirement accounts to employees. Blackstone Group LP bought benefits administrator Alight from Aon Plc last year for about $4.8 billion.

Fewer than two-fifths of non-retired adults think their retirement savings plan is on track, according to a report from a Federal Reserve survey released in May. Adults who didn’t attend college or complete a degree cited financial considerations — such as the cost of tuition being too expensive — as the most common reason for not doing so.

Genstar and Aquiline acquired Dresher, Pennsylvania-based Ascensus from J.C. Flowers & Co. in 2015. That deal valued the company at about $750 million, people familiar with the matter said at the time.

Ascensus partners with banks, credit unions and other financial services companies to support more than 60,000 retirement plans, according to its website. It also supports more than 4 million college savings 529 plans.

Ascensus has announced five acquisitions in the last 12 months, including an agreement this week for third-party administrator QBI, according to data compiled by Bloomberg.

—With assistance from Matthew Monks.

— Read LPL Makes Retirement Plan Deal With Vanguard, Ascensuson ThinkAdvisor.

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