Summit, NJ (August 8, 2024) – Simplicity Group Holdings, Inc. ("Simplicity"), a leading financial products distribution firm, today announced that it has entered into a definitive agreement for a majority investment from SkyKnight Capital, L.P. (“SkyKnight”) and Dragoneer Investment Group (“Dragoneer”). As part of the transaction, Dragoneer and SkyKnight will invest equity in Simplicity to provide a liquidity opportunity for Simplicity’s employee partners and acquire the interests held by funds managed by Lee Equity Partners (“Lee Equity”). The transaction marks a continuation of Simplicity’s commitment to employee ownership and institutional investment, all of which reinforces Simplicity’s unique partnership culture and accelerates the company’s ability to better serve its clients. Additional terms of the transaction, which is expected to close by the end of 2024 subject to regulatory approvals, were not disclosed.
“Since our last recapitalization in December 2020, Simplicity has experienced extraordinary growth, as our commitment to meeting the best interests of our clients and consumers, our intentional execution of a sustainable M&A strategy, and our unrivalled partnership culture, have attracted the industry’s most talented professionals,” said Bruce Donaldson, President and CEO of Simplicity. “The financial product distribution landscape continues to evolve at a rapid pace as new regulations, technological demands, and, most importantly, rising consumer expectations, are driving the need for a fully-integrated, national distribution business that delivers the best of wealth accumulation and protection products, all underpinned by holistic financial planning. With this new capital transaction, Simplicity is poised to meet the market where it is going and accomplish its mission of being the nation’s leading financial products distribution firm.”
“Simplicity is a best-in-class distributor of financial products that empower and enable American financial independence. We are excited to support the Simplicity partners as they continue to build a truly unique company that is delivering for consumers, retail agents and advisors, employees, and shareholder partners,” said Matthew Ebbel, Managing Partner of SkyKnight Capital. “Further, the investment in Simplicity is a continuation of our commitment to partnering with market-defining businesses with broad-based employee ownership. Finally, we are grateful for the opportunity to partner with Dragoneer for a third time in the Financial Services space.”
“Bruce and the Simplicity partners have built and scaled a meaningful business that serves as the distribution backbone of an important industry for Americans: financial products that enable wealth accumulation and protection,” said Marc Stad, Founder and Managing Partner of Dragoneer Investment Group. “Since Dragoneer’s founding, we have had the opportunity to invest behind several generational financial services and technology businesses, and we believe that Simplicity is well along that same path. As growth investors, we are delighted to work alongside both management and SkyKnight to support the company in its ambitious expansion plans.”
“Simplicity is committed to independent financial product distribution,” Mr. Donaldson continued. “For our independent bank and broker-dealer clients who rely on our protection product expertise, for our independent financial advisor clients who rely on our holistic financial plans that leverage the best of accumulation and protection products, and for our independent agency partners who rely on our national scale and our commitment to their independence, this transaction is another important milestone in our unrivalled ability to support all our clients’ business.”
“We are incredibly proud of our partnership with Simplicity during a period of transformational growth and many other notable strategic accomplishments. It has been a privilege to partner with Bruce and the Simplicity management team to build a market leader in the financial products distribution sector,” said Mark Gormley, Partner, Lee Equity. “Simplicity has proven that a commitment to innovation and creating value for all stakeholders in the ecosystem is a winning strategy. We are confident Simplicity is well-positioned for the future and look forward to their continued success,” added Mark Mauceri, Partner, Lee Equity.
“We are grateful to all the partners at Lee Equity who have shown great commitment to helping Simplicity grow, and we are thrilled to partner with SkyKnight and Dragoneer for the next phase of our development, as our model of employee-ownership, regular liquidity options, and an unrivalled partnership culture, assures that Simplicity’s best days are always ahead of us,” Mr. Donaldson concluded.
Waller Helms Advisors is serving as exclusive sell-side financial advisor.