Investment firm Wendel Group has revealed that it is in exclusive negotiations with private equity firm IK Partners to acquire a controlling stake in the latter from its partners for €383m.

As part of the proposed acquisition, the partners would reinvest a percentage of their earnings in future IK funds.

The deal will include an initial transaction and subsequent transactions structured to guarantee that all stakeholders’ interests are aligned.

Under the initial transaction, Wendel will acquire 51% of IK Partners’ shares and rights to 20% of the carried interest generated on all future funds raised by the latter.

The initial investment will be paid as €255m at the time of closing of the acquisition and €128m three years after closing, subject to certain conditions.

Wendel will acquire the remaining 49% stake in IK Partners in subsequent transactions, which will be undertaken between 2029 and 2032.

Through the acquisition, Wendel intends to launch its expansion in third-party asset management business with an aim to create additional sources of recurring income and real value generations.

Established in 1989, IK Partners invests in the business services, healthcare, consumer, and industrials sectors in Benelux, DACH, France, Nordics, and the UK.

The firm manages €11.8bn of private assets on behalf of third-party investors and has invested in more than 180 companies.

IK Partners CEO Christopher Masek said: “We are excited at the prospect of partnering with Wendel, whose investment will support our existing strategies, while also creating the opportunity for us to accelerate growth in other areas.

“The envisaged partnership will allow our Company to achieve its three strategic objectives which are to: access significant permanent capital; secure a long-term solution for our Partner Group to grow; and maintain our autonomy and identity.

Upon the completion of the proposed deal, IK Partners’ partner group and its employees will continue to operate autonomously in the same markets and pursue the same strategies under their existing brand.

Wendel is expected to commit a significant capital to support IK Partners’ present and future platform funds along with the creation of new strategies.

Wendel Group CEO Laurent Mignon said: “We are very proud to embark on this new entrepreneurial stage in Wendel’s development with a high-quality company like IK, sharing the same values and investment philosophy.

“Wendel and IK are strongly committed to creating value in their portfolio companies, with a strong focus on establishing solid governance and supporting their operational and external growth.”

The initial transaction is anticipated to be completed in the first half of 2024, subject to customary regulatory approvals.