Wealth management groups, given their relatively sticky revenue streams and play on multi-trillion dollar transfers from Baby Boomers – are seen as attractive buyout targets.

US-listed Focus Financial Partners, which holds a cluster of wealth managers in a number of countries, has received a proposal from buyout firm Clayton, Dubilier and Rice to take it private at a $4.1 billion valuation.

CD&R has offered to buy the investment advisory firm for $53 per share in cash, with Focus now engaging in exclusive talks with CD&R aimed at negotiating the terms of a deal, Focus said in a statement yesterday. 

“Negotiations regarding definitive terms and agreements are ongoing and there is no certainty that final terms of any transaction will be agreed upon or, if agreed upon, completed,” Focus said in a statement. “Focus will cease to be a publicly traded company if such a transaction is consummated.”

“CD&R has communicated that its latest non-binding offer of $53 per share represented its `best and final’ offer and that it was submitted with the understanding that there would be no further price negotiations,” Focus said.

News of the buyout offer sent shares of Focus to their highest level in nearly a year, touching $52.62 at one point, before coming off slightly, Reuters reported. The stock was up 8.8 per cent at $50.34 yesterday [Thursday afternoon], the report said. 

The statement said that Stone Point Capital is considering whether to join in the CD&R deal, including retaining some or all of its ownership stake once Focus is private and potentially putting in new equity capital.

The New York-based company has been a public company since 2018, having been owned by Stone Point and fellow private equity firm KKR & Co before entering the stock market.