ACA Group and Foreside Financial Group, LLC, which are both providers of governance, risk, and compliance (GRC) solutions to customers in the financial services sector, have announced that they have entered an agreement to “combine their two companies.”
Genstar Capital, a private equity firm, invested in Foreside earlier in 2021. Genstar will be the majority owner of the combined business entity “as a result of acquiring a controlling interest in ACA from Starr Investment Holdings, LLC upon completion of the transaction,” the update confirmed. The transaction is “expected to close in the first half of 2022,” the announcement revealed.
As mentioned in a release, the combination of ACA and Foreside will aim to “bring together the industry’s most experienced professionals to provide a full suite of GRC consulting, technology, managed services, analytics, and outsourcing solutions to the financial services industry.” At the completion of the merger, the firm will have more than 1,100 workers and 16 offices internationally and will serve more than 5,000 customers.
Shvetank Shah, CEO of ACA Group, is expected to become CEO of the new firm upon completion of the transaction.
Shah stated:
“Partnering with Foreside and Genstar will be a game changer in our industry. Both firms share the same commitment to create a category leader in a rapidly evolving space. Foreside and ACA have earned outstanding reputations and our aligned vision, client-centric focus, and commitment to innovation will help our customers navigate their most complex GRC challenges.”
Combining ACA’s tech, regulatory compliance, cybersecurity, ESG, and performance capabilities with Foreside’s distribution, compliance consulting, and broker-dealer capabilities “creates the industry-leading end-to-end GRC platform financial services companies need to achieve superior growth in a compliant way,” the update noted.
Rich Berthy, Founder and CEO of Foreside remarked:
“We at Foreside are very excited by the opportunity this combination presents. Over the past 15 years Foreside has built its reputation as an expert provider of customized compliance and technology solutions and services to the investment management industry. The combined company will have the global resources to continue to develop innovative products with a single vision focused on providing the best client advice.”
Tony Salewski, MD at Genstar, and Sid Ramakrishnan, Principal at Genstar, added:
“We are thrilled to bring these two leading GRC companies together in a transformative transaction. We believe the combined company will be well positioned to capitalize on secular market growth trends and to help global clients navigate an evolving and complex regulatory landscape. We are excited to support the team with capital and expertise to execute a growth plan that includes continued organic and inorganic growth.”
The transaction is currently “subject to customary regulatory approvals and closing conditions.”
The terms of the transaction “were not disclosed,” the update confirmed.
Jefferies LLC acted as the exclusive financial advisor to ACA. Raymond James & Associates, Inc. served as financial advisor to Genstar and Foreside. Kirkland & Ellis LLP acted as legal counsel to ACA. Willkie Farr & Gallagher LLP was the legal counsel to Genstar and Foreside
