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Orion in ‘daily’ talks with potential buyers, CEO says

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Orion has received interest from multiple suitors in recent weeks about a potential sale, CEO Eric Clarke told Financial Planning. The firm is up for sale by its private equity majority owner, says a source familiar with the matter.

The private equity firm TA Associates took a majority stake in Orion in February 2015 and is inching closer to the critical five-to-seven year timeline usually associated with PE exits.

The turnkey asset management platform’s chief says no sale is imminent.

“There is a lot of speculation stemming from the fact that TA partnered with us five years ago,” Clarke says. “There are other PE firms looking to deploy capital and one of the most attractive ways to do that is in the independent advisor space.”

Orion says it topped $1 trillion in assets under administration. The firm says it partners with some 2,000 firms from boutique RIAs to enterprise-level institutions. In April, Orion announced a major restructuring intended to align its subsidiaries and take on some of its larger competitors.

The new parent company — called Orion Advisor Solutions — brought Orion Advisor Services, the newly acquired turnkey asset management platform FTJ FundChoice and asset manager CLS Investments and Constellation Trust Company under one roof.


Clarke's firm is having "daily" conversations with potential buyers, he says. “There's a lot of interest in making an investment in our business and that’s due to the results that our advisors have.”

TA Associates invested in more than 500 companies since its founding in 1968 and commits over $2 billion per year into growth companies, according to a company statement. The PE firm did not return a request for comment.

Barron’s first reported the potential for a sale this week and estimated its value at close to $2 billion. Potential deals are reportedly being advised by Raymond James, which also did not return a request for comment.

Who are likely buyers? Possible interested parties could include large fund families like Morningstar or other TAMPs like Vestmark, SS&C and AssetMark, says Dan Seivert, CEO of the investment bank consultancy Echelon Partners.

“On one hand, I’m surprised because things are going so well,” he says. However, PE firms often move to sell a portfolio company at a high point if growth is projected to slow in future years, he adds.

For example, would a PE firm rather hold a company seven years and get a 20% internal rate of return or five years at a 30%?

“In most cases it is the latter,” Seivert says.

In July, Orion snapped up tech company Advizr in a move to give enterprise clients a more robust financial planning platform.

“TA Associates has been an investor for a while now,” says Joel Bruckenstein, founder of the T3 technology conference. “I am sure they must be thinking about their exit strategy. I wouldn’t be surprised if some preliminary talks took place.”

While the majority of the firms Orion is in conversation with are PE firms, according to Clarke, the eventual identity of a potential buyer — and fate of the financial services technology provider — remains up in the air.

When asked about which firms, or types of firms, are the closest to a possible deal, Clarke says, “Right now, none of the above.”

A previous version of this story incorrectly attributed a comment about a potential sale to Eric Clarke.

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