HR firm Zellis to be acquired for $1.5Bn

BRISTOL, ENGLAND — Investment company Bain Capital has agreed to sell payroll firm Zellis Group to Apax Partners for £1.25 billion (US$1.56 billion). 

Apex to fund deal using unitranche structure

The acquisition will see Apax Partners acquire Zellis using a £450 million (US$555 million) unitranche loan from private credit funds. 

Investopedia defines a unitranche loan as a hybrid loan structure that combines senior debt and subordinated debt into one loan, allowing banks to compete better against private debt funds. 

“After the great Covid resignation, companies across the board are doubling down on limiting employee churn and enhancing employee engagement and transaction. We think payroll tech will continue to be an attractive space,” said Christophe Jacobs van Merlen, a partner at Bain Capital.

Zellis’ robust performance under Bain Capital

Since acquiring Zellis in 2017, Bain Capital has overseen significant growth, including the acquisition of a benefits administration software platform, Benefex, in 2018. The company now caters to high-profile clients such as Harrods and Jaguar. 

James Stevens, a Managing Director at Bain Capital said: “We are thrilled to have seen Zellis deliver 20% annual organic growth over the past three years and look forward to seeing continued success.”

“We have been impressed with the business that John and his team have built over the last several years. Zellis has a strong set of products and long-standing customer relationships that underscore its attractive market position across its business units,” said Adam Garson, Principal at Apax.

Zellis, headquartered in Bristol, serves around one-third of the FTSE 100 companies. It facilitates payments or rewards for approximately five million individuals monthly across the United Kingdom, Ireland, India, and the Philippines. 

Evercore and Morgan Stanley advised Zellis and Bain Capital, while Arma Partners and Citigroup Inc. advised Apax Partners.