Advent Eyes Civil Service Pension Firm Float

The outsourcing giant which oversaw elements of Royal Mail's controversial privatisation is preparing for a sale or flotation that would land its private equity backers a handsome windfall.

Sky News understands that the owner of Equiniti, which is one of the UK's biggest providers of business process outsourcing services, is examining the possibility of a public listing as soon as this year.

Rothschild, the investment bank, is being lined up by Advent International, which acquired Equiniti in 2007, to work on a review of its options for the business, insiders said on Tuesday.

A number of other buyout firms have already made enquiries about buying Equiniti, which is responsible for administering the pensions of millions of UK civil servants, they added.

Equiniti, which was previously owned by Lloyds TSB, counts more than half of the members of the FTSE-100, including HSBC, Marks & Spencer and Shell, among its clients.

Its examination of a flotation has emerged just weeks before the General Election, when the role of rival outsourcers such as G4S and Serco is likely to be the subject of political debate.

Originally a registrar business focused on the administration and payment of shareholder dividends at companies such as Barclays and Tesco, it has diversified into services including pension and benefits administration, and technology to support loan servicing and complaints-handling.

Rothschild's appointment is unlikely to be finalised until Equiniti has appointed a new finance director, which is expected within the next couple of months, sources said.

The company's chief executive, Guy Wakeley, joined just over a year ago, replacing Wayne Story, who quit shortly after Royal Mail's £3.3bn flotation.

The ensuing controversy around the postal operator's valuation ensnared Equiniti, which was dogged by complaints that the outsourcing group had failed to process 'Sell' orders sufficiently quickly.

Criticisms of Equiniti posted on Twitter and other internet forums during the privatisation had been investigated and been found to be invalid because investors had failed to understand correctly the procedures for selling Royal Mail shares, sources said at the time.

Equiniti describes itself as "the leading provider of shareholder services in the UK based on revenues and the number of underlying shareholder and employee records administered, providing services to more than 1,000 corporate clients and 17 million shareholders".

It boasts that its longest-standing client relationship has existed for 177 years.

The company has been acquisitive under Advent's ownership, with its most significant deal arguably taking place in October when it took control of MyCSP, which administers civil service pensions.

Sources said that Equiniti could be worth in the region of £1.5bn when it is sold or floated.

Equiniti employs nearly 3000 people and is due to report its results for last year later this month.

Advent and Equiniti declined to comment further.