Doughty Hanson & Co, the European private equity firm, is to acquire Equity Trust, the business administration and fiduciary service provider majority-owned by Candover, for a total consideration of €350 million (around $444 million) subject to regulatory approvals and competition clearance, with the intention of merging Equity Trust with its existing portfolio business TMF Group.

“The rapid pace of globalisation, combined with growing and increasingly complex regulation, is driving an outsourcing trend amongst organisations that are keen to focus on their core competencies and increasing their transparency and corporate governance. Equity Trust is well‐placed to take advantage of these trends and to benefit from further sustained growth in demand for its services,” said Mark Corbidge, co‐head of private equity at Doughty Hanson.

Doughty Hanson, which acquired TMF Group in July 2008 for €750 million, intends to merge Equity Trust with the portfolio business, with the aim to create the world leader in the growing market of complex business administration outsourcing, and to redefine the market for such services.

“Through a combination with TMF, which delivers highly complementary services and which is also growing rapidly, we expect to deliver significant value by creating a high growth, market defining leader that is greater than the sum of its parts,” Corbridge said.

In terms of transaction details, the sale of Equity Trust represents a 24 per cent uplift to the valuation of Candover and is expected to generate estimated cash proceeds of €24.2 million, including an initial payment of €15.8 million and a guaranteed deferred payment of €8.4 million. The sale of Equity Trust will result in an increase of 22 pence per share (unaudited) in the net asset value of Candover Investments as at 30 June 2010.

Equity Trust employs more than 1,200 people in more than 40 offices around the world, and services more than 14,000 client entities. Candover, which acquired Equity Trust in May 2003, supported a number of strategic acquisitions, notably that of ABN Amro’s Trust business in 2005, which contributed to revenues increasing from €60 million in 2003 to €140 million in 2010.