Project Description

HMT LLP advised Ethos Partners on their investment in compliance consultancy and regtech services provider, Compliance Services.

Founded in 2003, Compliancy Services is a market leader in its sector, providing compliance consultancy and regtech services for firms that offer regulated financial services. Compliancy addresses an attractive growing market driven by regulatory change and provides business-critical services to a broad spread of regulated financial services clients. They help clients become authorised by the Financial Conduct Authority and the Prudential Regulation Authority and manage their ongoing compliance and regulatory obligations.

The transaction was led by Ethos Partners, whose principals and HNW investor base provided equity funding to support the acquisition. Ethos Partners is a private investment office set up by private equity professionals to provide £3-10m of supportive equity capital to established, ambitious UK companies.

The transaction facilitates the retirement of founder Iain Stephen, with majority shareholder and current Chairman Ben Mason retaining a significant minority shareholding in the business and staying as a Non-Executive Director. In partnering with industry veteran Philip Naughton as CEO, the buyout presents an opportunity to continue to support its clients who face an ever-increasing regulatory burden via regulatory updates, consultations and thematic reviews and providing a cost-effective outsourced and partner solution for clients’ compliance function.

HMT undertook financial due diligence for Ethos Partners on this transaction.

Scott Bannerman at Ethos commented:

“We are delighted to be supporting Philip with the buyout of Compliancy Services. With an ever-increasing cost for FCA and PRA registered firms to remain compliant with regulations, Compliancy Services are well placed to drive continued growth of the business. Paul and Corin, once again, have helped Ethos hugely in understanding the financial profile of the business and provide invaluable commercial insight as part of their reporting. We look forward to working with them again on future investments.”

Paul Read commented:

“We are delighted to have advised Ethos on their investment which will support Compliancy Services in their future growth strategy, particularly in the areas of Capital Markets and Payment Services.  There is an increasing need for FCA and PRA registered firms to remain compliant with regulations, ideally positioning Compliancy Services to drive continued growth for their business. We look forward to working with Ethos Partners again in the future.”