Interpath Advisory to be acquired by Bridgepoint Capital

H.I.G. Capital’s European division has cashed out of Interpath Advisory, following months of speculation on the consultancy’s future ownership. Bridgepoint has purchased a majority stake in operations, in a deal reportedly worth more than £800 million.

Interpath Advisory has its origins in 2021, when KPMG announced it had sold off its restructuring wing. The £400 million carve-out ultimately saw the unit helmed into independence by its partners, with the backing of H.I.G. Europe, the European affiliate of investment firm H.I.G. Capital.

The deal created the largest independent corporate turnaround firm in Britain, however, early life was by no means easy on the firm that soon rebranded as Interpath. Set-up costs saw it initially post losses of £10.6 million in the year to March 2023, following a £10.2 million loss the previous year. The years since have seen it turn a corner, though, with its expanding advisory and consulting portfolio helping it to hit a £3 million pre-tax profit in 2024, while Mark Raddan replaced Blair Nimmo as CEO.

Amid a difficult moment for the consulting sector, this may have prompted H.I.G. to see the time as right to exit Interpath – announcing that it would explore its options around the £800 million-valued firm. While higher interest rates and macroeconomic volatility were dampening deal activity across the economy, a perceived coming ‘zombie apocalypse’ (where a large number of companies unable to service their debts might finally collapse) is driving interest in restructuring and insolvency consultancy. That has helped to make a lucrative exit from Interpath easier than in other areas of its backer’s portfolio.

Now, reports in the UK press have confirmed that London-listed buyout firm Bridgepoint has agreed to buy a controlling stake in Interpath Advisory. Banking sources told Sky News the deal was set to conclude, after “a hotly fought auction which was due to result in a second round of bids later this month” – and Blackstone, Onex, PAI Partners and Permira understood to be among the other bidders.

Interpath had seen earnings before interest, tax, depreciation and amortisation double since going independent four-and-a-half years ago, and it recently published financial results showing a 26% increase in revenues to nearly £200 million. With high-profile cases recently including a restructuring of Manchester United, and accessories store Claire’s, the firm has grown in stature in the market – and is thought to therefore be well-positioned to better those results.

Indeed, Interpath is understood to be in line for the administration of the British arm of the casual dining chain TGI Fridays, while it is already advising family-owned shoe retailer Russell & Bromley on a potential sale. As a result, the sale to Bridgepoint is said to have cleared the £800 million price-tag initially set – while CEO Mark Raddan and other senior executives are expected to retain a stake in the firm following deal.

Raddan said of the move, "Although we’re only four years old, we have a clear vision to become one of the world’s leading advisory firms and have made enormous strides towards that goal - planting the Interpath flag in major financial centres across the globe, making bold acquisitions, hiring market-leading professionals, and investing in our people and infrastructure.”