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Summit-based Simplicity Group Holdings, A financial products distribution company said Thursday it has entered into a definitive agreement with SkyKnight Capital and Dragoneer Investment Group for a majority equity investment.
As part of the transaction, Dragoneer and SkyKnight will invest equity in Simplicity, provide liquidity opportunities to Simplicity’s employee partners, and acquire interests held by funds managed by Lee Equity Partners.
This transaction marks a continuation of Simplicity’s commitment to employee ownership and institutional investing.
The transaction is expected to be completed by the end of 2024, subject to regulatory approvals. Terms have not been disclosed.
“Since our last recapitalization in December 2020, Simplicity has experienced extraordinary growth as a result of our commitment to serving the best interests of our clients and consumers, our intentional execution of a sustainable M&A strategy, and our unparalleled culture of collaboration that has attracted the best professionals in the industry,” said Bruce Donaldson, Simplicity President and CEO. “The financial product distribution landscape continues to evolve rapidly as new regulations, technology demands, and most importantly, rising consumer expectations drive the need for a fully integrated national distribution business that offers the best wealth accumulation and protection products, all underpinned by holistic financial planning. With this new capital transaction, Simplicity is poised to meet the direction of the market and achieve its mission of becoming the nation’s leading financial product distribution company.”
“Simplicity is a premier distributor of financial products dedicated to empowering and enabling financial independence for Americans. We are excited to support Simplicity’s partners as they continue to build a truly unique company that serves consumers, retail agents and advisors, employees and shareholder partners,” said Matthew Ebbel, Managing Partner of SkyKnight Capital. “In addition, the investment in Simplicity is a continuation of our commitment to partnering with market-defining businesses with broad employee ownership. Finally, we are excited for the opportunity to partner with Dragoneer for a third time in the financial services space.”
“Bruce and the partners at Simplicity have built and scaled a meaningful business that serves as a distribution pillar for an important industry in the U.S.: financial products that enable wealth building and protection,” said Marc Stad, Founder and Managing Partner of Dragoneer Investment Group. “Since Dragoneer’s founding, we have had the opportunity to invest in several intergenerational financial services and technology businesses, and we believe Simplicity is on the same path. As growth investors, we are excited to partner with management and SkyKnight to support the company in achieving its ambitious expansion plans.”
“Simplicity is committed to independent financial product distribution,” Donaldson continued. “For our independent bank and broker-dealer clients who rely on our expertise in protection products, our independent financial advisor clients who rely on us for their overall financial plans to take advantage of our accumulation and protection products, and our independent agency partners who rely on our national scale and commitment to their independence, this transaction is another important milestone in our unparalleled ability to support all of our clients’ businesses.”
Waller Helms Advisors served as exclusive sell-side financial advisor. Dentons Sirote served as legal advisor to Simplicity. Weil, Gotshal & Manges LLP served as legal advisor to Lee Equity. Ropes & Gray LLP and Morrison Foerster served as legal advisors, and Piper Sandler served as financial advisor to SkyKnight and Dragoneer.
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