TPG-backed Morrow Sodali eyes tie-up with US peer ahead of IPO

afr.com:

Proxy advisory Morrow Sodali is eyeing a potential tie-up with Alliance Advisors, a move designed to beef up the business ahead of a possible Wall Street initial public offering.

Morrow Sodali-owner TPG Growth – the smaller buyout arm of TPG Capital – wants to form a one-stop, global shop combining proxy advice services with investor and public relations capabilities, people familiar with the discussions told The Australian Financial Review.

Peter Brookes, left, and Christian Sealey of Morrow Sodali have spoken of their desire to grow through acquisitions. Louie Douvis

Talks of a combination between Morrow Sodali and New Jersey-headquartered Alliance comes as private equity firms grow enamoured by the consistent cash flow and capital-light nature of professional services firms.

With trillions of dollars to deploy, buyout shops are hungry for assets like service-oriented companies, which have a roster of large-cap clients, and are free of costly assets like heavy machinery and manufacturing facilities.

TPG, for instance, made an offer to buy big four firm EY’s consultancy arm last week, and locally, Allegro Funds acquired law firm Slater & Gordon and PwC’s government services arm – rebranded Scyne Advisory – earlier this year.

Talks remain in their infancy, and there is no guarantee of a deal being completed, the people said. A spokesman for Morrow Sodali and a spokeswoman for TPG declined to comment.

With offices throughout the region, from Sydney to Seoul, Morrow Sodali is a go-to operator for corporate governance and shareholder services. It works with more than 850 corporate clients globally, including on some of the market’s biggest proxy fights like AGL’s battle with Mike Cannon-Brookes’ Grok last year.

Morrow