Issue 157 | July/AugustMay 20172018 || privateequityinternational.comprivateequityinternational.com FOR THE WORLD’S MARKETS

THE LP SPECIAL On the minds of investors

TAKINGDEAL THE REINS Clessidra’sMECHANIC white knights ABOVE AND BEYOND CVC’s record-breakingCOMPENDIUM ‘one-and-done’ fundraise

CLAUSEA AND collection EFFECT of case studies Questioningdetailing the key manthe operational value creation stories behind PLUS: Trump pullssome the plug of on theParis; Britishindustry’s most electoratesuccessful serves up another deals. surprise; the lure of carve-outs; modelling out fund finance; the Germany roundtable; and much more… CONTENTS

PRIVATELY SPEAKING REGULARS DEAL MECHANIC26 13 Regulation Watch: FightingCOMPENDIUM back 15 Life less limited: Slow going against hacks The changes needed to include Data and cybersecurity top the private equity in defined contribution priority list of regulators on both sides retirement plans are drastic of the Atlantic DEAL MECHANIC 16 Second thoughts: Snowed under DEAL MECHANICS 14 Side letter: Muddy waters Not all LPs in ’s Fund VII

The private funds industry is are happy about having just the deal, in the co-ordination of the due 2 The ultimate deal mechanic 8 In the driver’s seat diligence, in the legal aspects, in the asset institutionalising, but the methods 20 days to decide on a GP-led and liability aspect.” What’s right for one portfolio com- Navisfor calculating Capital andPartners reporting transformed secondaries process Meilleurtaux also began a programme of international expansion, establishing a pres- pany may not be right for another, andperformance internationalised are still allthe over Australian the place ence in Morocco in 2015. Towards the end of Equistone’s holding period Meilleurtaux but there are several common oper- automotive company before sealing a 18 Deal mechanic: Booting up acquired a minority stake in MelhorTaxa. Norwegian software company com, an online comparison and brokerage ational levers private equity firms can 3x exit through two trade sales, writes firm in Brazil. Visma grew into one of Europe’s *** employ to jump-start growth and en- Carmela Mendoza. By this time, Equistone was being repeat- largest after completing more edly approached by potential buyers. “The developments we set out to achieve hance returns. than 100 acquisitions under KKR’s took less time than expected. When you have a lot of unsolicited approaches you 10 Copied right ownershipMaison d’etre: the market share of mortgate brokers in France meant Equistone saw an opportunity come to a point where you just realise that you have to be opportunistic,” Jacqueau says. 4 Driving US expansion How replicated a tried-and- 16 Gettingpaid off with visitors the more than house doubling in order “We came to the conclusion that it was 46 Capitalduring the four-year Watch investment period €16m probably the right timing to exit because Carlyle Japan’s team led the tested approach in the patents indus- Ato 26 strongmillion per year brandin 2016. nameRevenue and on entry a market in four years we had made more than we DEAL MECHANIC expected. Hervé Hatt was comfortable with charge on improving the technology try. Alex Lynn reports. withGROWING plenty THE ofPLATFORM room for growth enticed the idea of taking the business into a new 50 Data “WhenRoom: we announced Mind the deal in the gap phase of growth and it was, in his view, the Takingcompany’s the lead efficiency and boosting Equistone2013, Meilleurtaux to was identifiedget behind the mort- right timing.” as a natural platform for consoli- €50m The auction process for the business Revenue on exit Canada Pension Plan Investment 13 3dation, so we received a lot of inbound attracted more than a dozen bidders. In the 52 Final Close international growth, writes Carmela gageinvestment opportunities,” broker, Jacqueau writes says. Isobel Markham. end, the winner was Goldman Sachs, which Board’s head of Asia-Pacific, Suyi Kim, During the hold period, Meilleurtaux acquired the business in a deal understood Mendoza. completed five bolt-on acquisitions, which to value Meilleurtaux at around €260 mil- has driven a decade of growth for the helped the company build out its product 111 lion. The investment bank used capital from 18 Tappingofferings. the right Employeesvein on entry West Street Capital Partners VII, which held fund and she’s just getting started ALSOCREATING NEWIN CUSTOMERSTHIS ISSUE The first, in 2014, was bank compari- a first close in December 2016 on $4.5 bil- The plant Altus helped build in Overson website Choisir-ma-banque.nearly seven This was years, Warburg lion, and is its first buyout fund since 2007. followed by loan comparator The transaction delivered a return to Mexico allowed Rocla to sign up DEAL MECHANIC 4 Clouds over Dubai 17 Backmoreand broker for Multi-Impact than more anddoubled online debt 300 EBITDA at Chi- investors in the €1.5 billion Equistone Part- Kansas City Southern Railway consolidation specialist Préféo in January Employees on exit ners IV of 8.2x and a gross internal rate of 3Company’s MexicanThe subsidiary results as a client. of an LP-led audit into the The2016 thenfourth insurance comparisonHall of website Famer is the return of more than 70 percent. na Biologic Products and created a FUND AND DEAL FINANCE SPECIAL According to Greenberg, half of Kansas MerciHenri.com. All were rebranded under For Jacqueau, the investment confirmed City Southern’s revenueAbraaj comes Growth from its Markets Health Fund 2004-vintageboomingthe Meilleurtaux banner. plasmabased fifth fund from drugs Hellman compa - Equistone’s strategy of being open to invest Mexican operation and it wanted to have a “I think we’ve been helpful in this 8.2x in complex situations. could have wide ramifications & context,”Friedman Jacqueau says. “Hervé Hatt is a Return “One should not forget that it was a concrete tie supplier in the country to meet ny.great professional Carmela who did notMendoza necessarily reports. relatively high-risk transaction, it was a 36 Credit goes to… its needs. Rocla also added Florida-based real need our help understanding the business loss-making business when we bought it. estate and8 railwaysA company lukewarm CSX Corpora- response 18 Makingopportunity, but lemonadegiven our experience in EquistoneL EGACYis open toISSUES complexity and I think tion and Alberta-based Canadian Pacific Rail- M&A, we helped in the way we could set >70% it’s one ofSuch the positive significant aspects business of our investtrans-- 37 Taking a flexible approach way to its customerEnergy base, more than fundraising doubling is improving but Thethe price, fund in the wayof we funds could negotiate market Gross IRR has been ment strategy,”formation he says. was n inevitably met the customers in the freight market. with challenges. Foremost, mar- 12 Howdemand from LPsguided remains Netafim subdued to underjune 2017 pressure in recent years, but in 4gins in theprivate original equity colocation international data centre23 Freight customers make enormous the squeezed middle firms still find business contracted more rapidly than 40 Does one size fit all? orders compared becomingwith smaller transit cli a- global leader anticipated. ents, Greenberg10 says,Weighing and about 70 percent up the possibilities ways to differentiate themselves “The hosting business outperformed our of Rocla’s sales comeWe from look the former. under The the bonnet of the pri- expectations and the colocation reselling, 42 Mega-funds and their expansion drove Thea growth Tax in revenue Cuts to and Jobs Act affects which we thought was a stable business, $88 million whenvate Altus exited. equity firm’s investment in a kib- underperformed,” says Hitchcock. mega-financings almost all aspects of how private 24 Data, data everywhere “At one point we’d got a business where Having not made a rail investment one side [MCS] was growing at 40 per- before, Altus had butzequityto become oriented comfortable funds are irrigation managed. business. Here’s From machine-learning algorithms cent a year, but the other side was declining. with the cycles inherentwhat in wethe industry. know so far to iPad apps, funds of funds are Managing and understanding that dynamic 44 An enduring relationship Activity depends on new projects or replac- was something the management had to deal ing existing infrastructure, rather than embracing the data revolution with. It was the key challenge.” linear growth.14 Out of the park The disparity meant Adapt took longer The ties that bind: Rocla executives visit the Colorado plant 12 French revolution Fresh servers: tech acquisitions helped Adapt shift its focus to the cloud to reach the £10 million EBITDA thresh- 6 Sleeping giant “The demandThrough can be volatile,” Greenan aggressive- programme of 20 Business, reprogrammed old at which Lyceum planned to sell, and been constrained by the previous owners, company DS Brown, which manufactures berg says. “That’s theFrance’s challenge, understand private- equity market enjoyed 30 Anconvenience addictive food retailer Greencore model Group. Hitchcock. “There was a lot of change in the GP’s exit was delayed by a year to 18 GreenbergAltus says. Capital Partnersrubber, steelexpanded and concrete products, Ro- as an ing the degrees ofoperationala customer strong demand.” 2017. improvements Is that a sign and of thingsM&A, It ByprovidesAs thethe demand time forless managed Lyceumstability host- the business thanCapital over athe blind- five exited years and we months. “Our investment thesis was to back its operating advisor in 2013. The same year, *** ing became more established “it became were invested in getting it right. Working *** management team, who had been stifled Robert Rayner, who had sat on the boards In summer 2016, whento come? Rocla had the larg- poolabout havingfund, a really but efficient the sales economicsand with the CEO we had of to change deal- a couple By exit, the heavy lifting was done and man- cla’s freight capabilities to make it a Epiris transformed the stagnating car- cloud-hostinglead generation machine, and consistent business of members ofAdapt, the management teamthe and aged cloud services represented closer to under its prior ownership from spending of several US-based manufacturing compa- est market share in North America, it was by-dealfirst-class delivery”, can says beHitchcock. attractive To that strengthen the team with additional roles.” 70 percent of sales. Adapt had also expanded capital forleading growth,” he says. rail infrastructurenies and served as presidentcompany. and chief oper - approached by severalavan strategic parks buyers. operator into a UK market companyend, Adapt brought in hadan additional undergone non- Keeping aheada metamor of market trends- its MCS market share from £300,000 a The firm also raised more than $15 mil- ating officer of cement company Essroc, Altus15 hired investmentSlow bank going Robert W executive board member to sharpen the remained a theme. Two and half years ago, month in September 2011 to more than lion of debtBy capital Annabelle to fuel the growth Ju. in joined the board. Baird to co-ordinateleader,The discussions changes with writes poten- Isobelneeded Markham. to include 32 Howphosis,commercial we effort aslanded based Victoria in London. Apollo Robsonon a visit toIX the reportsUS, Hitchcock and Smythe £3.4 million by July 2016, with revenues capacity and new plants. “Kirk and Robert assisted the manage- tial buyers. The sale closed with Germany- recognised more hosting clients were for the sector growing 20 percent in the The overall headcount at the company ment team in terms of strategic discussions, based rail infrastructureprivate supplier equity Vossloh in defined contribution CFO MartinMAKING IT SEAMLESS Kelly on howusing hyperscalers Apollo – which accommodate last year of investment. The CEO’s ability to “knit it all increasing computing demands – for some Annual revenue grew from £32 mil- grew organically as it added plants and determining execution risk and helping the Group on 4 January, generating a 57.3 retirement plans are drastic raisedtogether” a record-breaking was key to the suc- of their applications, fund and Amazon Web Ser- lion for the year ending 30 June 2011 to bought competitors, and the senior execu- management with additional advice where percent gross internal rate of return and a cess of the business, says Hitch- vices was leading the charge. £45 million in June 2016, and EBITDA from tive level stayed the same. needed,” says Greenberg. money-on-money multiple of around 4.5x. 3cock. “Adapt was a buy-in with M&A in Anticipating future client needs, Adapt £3.7 million to £10.1 million. Employee The firm did, however, bring in two out- Altus stayed heavily involved with strate- “We had achieved our goals in terms an emerging and growing market. Making hired a technical team to support its AWS numbers had swelled from 100 to 210. siders. It hired Kirk Feuerbach, the chief gic planning, quarterly meetings and capital of growth and value creation,” Greenberg the whole thing work so the client delivery offering and funded the development of Following an off-market approach at was really excellent was key to success.” a platform. By the time of exit in August a premium to other interested parties, executive officer of Altus’s former portfolio approvals for the company. says. n The company was a service business 2017, its first two customers had gone live. US-managed hosting and cloud services NEW YORK Private Equity International is published © PEI 2018 and the technologybe aware was “pretty that standard” external “AWS was contributors a reaction to what was happen- provider Datapipe, in which Abry Partners march 2017 private equity international 19 130 West 42nd Street, Suite 450 10 times a year by PEI. and less ofmay a challenge represent than getting right firms ing the that market, maya natural have evolution,” says is an investor, acquired the company. The the “service wrap” – the people, systems Hitchcock. “The buyer [Datapipe] has quite sale generated a money multiple of 3.2x New York, NY 10036 No statement in this magazine is to and processesan that interest hung around in it –companies says a large AWS business,and/or so that will continue.” for Lyceum. n +1 212 633 1919 To find out more about PEI please visit: be construed as a recommendation february 2017their securities mentioned in their private equity international 19 Fax: +1 212 633 2904 www.thisisPEI.com to buy or sell securities. Neither this contributions herein. publication nor any part of it may LONDON PRINTED BY: Stephens & George Ltd. be reproduced or transmitted in any Cancellation policy: you can 100 Wood Street www.stephensandgeorge.co.uk form or by any means, electronic or cancel your subscription at any London EC2V 7AN mechanical, including photocopying, time during the first three months +44 20 7566 5444 recording, or by any information of subscribing and you will receive Fax: +44 20 7566 5455 storage or retrieval system, without a refund of 70 percent of the total HONG KONG the prior permission of the publisher. annual subscription fee. Thereafter, no 19F On Hing Building ‘Building Value’ Whilst every effort has been made to refund is available. Any cancellation 1 On Hing Terrace is PEI’s campaign ensure its accuracy, the publisher and request needs to be sent in writing Central, Hong Kong to promote examples of genuine contributors accept no responsibility [fax, mail or email] to the subscriptions +852 2153 3240 operational value creation by private for the accuracy of the content in departments in either our London or Fax: +852 2110 0372 equity owners this magazine. Readers should also New York offices.

MAY2 2018private equity international PRIVATE EQUITY INTERNATIONAL march 20182 DEAL MECHANIC

DEALS The ultimate deal mechanic

What’s right for one us getting equity control of the business,” put together a new board of relevant people portfolio company may not managing partner Alex Fortescue told PEI. for the various work streams and value-cre- be right for another, but Sometimes a deal outside of a GP’s usu- ation opportunities the firm had identified. al “playbook” can lead to positive results. there are several common Mortgage broker Meilleurtaux was not a typical EQT brought in former QlikTech chairman operational levers private investment for Equistone Partners Europe: in and CEO Mans Hultman for his knowledge equity firms can employ 2012 when HSBC was selling the business on sales force effectiveness and former Mi- to jump-start growth and for French bank BCPE, it was loss-making, crosoft Sweden head Jonas Persson for his and the business was only just breaking even product know-how and to focus on research enhance returns. when the deal completed in 2013. and development. Vagn Sorensen, who had By Isobel Markham But three key elements – the strength of the chaired several EQT portfolio companies, management team, the market opportunity, and came in as chairman to drive the firm’s in- When it comes to value creation at portfolio the strength of the brand name – persuaded dustrial agenda and operational improve- companies, it’s clear there is no “one-size- the firm it was a good investment. ment programme. EQT also brought in a fits-all” approach. But if you look at strong “We were convinced there was a great new CEO, Todd DeLaughter, and a new chief examples of operational excellence, you’ll see potential for this business in France,” Equistone sales officer and chief marketing officer to there are a few things they have in common. managing partner Guillaume Jacqueau told PEI. implement the outlined value creation plan. Our regular Deal Mechanic feature in Private In December we featured Coller Capital’s When was gearing up to Equity International goes under the bonnet of restructuring of Irving Place Capital Partners acquire two retail options-trading compa- a recent deal to find how operating partners Fund III, a fund which straddled the global fi- nies, OptionsHouse and tradeMONSTER, have added value to their portfolio companies. nancial crisis and was left with a split portfolio: it turned to an old acquaintance. It enrolled Here are a few things we’ve learned from pre-crisis investments, which still needed time Mike Curcio – who had led the brokerage at the last 12 months of examining the art of before they could be optimised and sold; and E*Trade Financial, in which General Atlantic adding value to secure a successful exit. post-crisis ones, which were faring better but had been an early investor – as a consultant hadn’t had enough time to mature. before the acquisition was completed, with DO THE RIGHT DEAL IN THE During the process, Coller quickly a brief to become familiar with the man- FIRST PLACE emerged as the buyer of choice, thanks to agement teams and help develop a strategic This may sound like private equity its willingness to “pay the fairest and highest plan. He later became chief executive of the 1101, but doing the right deal for a price” and to “provide a flexible and smart combined company. particular portfolio company can be easier approach to the structuring”, IPC’s co-man- said than done. aging partner John Howard said. When the ROLL UP! ROLL UP! For Epiris, the right solution with Park deal closed in July 2015, 90 percent of LPs Without a doubt, M&A – whether Resorts – later renamed Parkdean Resorts voted in favour and 35 percent rolled into it be one giant merger or tens of – was to buy a series of debt tranches which the new vehicle. 3smaller add-ons – is the value cre- eventually gave the firm a blocking minority ation lever you will read about most often and the ability to work with the private equity GET THE RIGHT TEAM IN in the pages of Deal Mechanic. investor, management team and banks on a PLACE For EQT and Automic, it was the add-on consensual restructuring. The first thing on EQT’s to-do of Paris-based Orsyp, an IT automation and “Essentially that involved extending the 2list after the acquisition of busi- optimisation solutions business. Focused maturing of the debt, converting a piece of ness process automation company UC4 – on France and with a good market posi- our debt into a PIK instrument and, crucially, which it later rebranded Automic – was to tion in Canada, Orsyp was geographically

3 PRIVATE EQUITY INTERNATIONAL MAY 2018 DEAL MECHANIC

complementary to Austria-based UC4. Group, a UK-based provider of secure tran- General Atlantic can hold investments for “The transformational add-on acquisition scription services. This enhanced Appen’s longer than the industry average, which makes of Orsyp helped us achieve a completely security language service solutions to reach the sale of OptionsHouse to E*Trade after different level of scale and profitability com- government services and to expand further just two years unusual for the firm. pared to when EQT entered the company,” into the UK and Europe. “Some of that had to do with achieving Per Franzen, a partner at EQT, told PEI. During Equistone’s ownership, the operational milestones we were looking The integration of Orsyp brought sub- Meilleurtaux diversified from its original to achieve more swiftly than we originally stantial synergies and improved the company’s remit of selling just mortgages and loan anticipated,” Paul Stamas, a principal in the margins from 23 percent to 32 percent. insurance, and began to offer debt consol- firm’s New York office told PEI. A large part of the value creation plan idation, consumer loans, bank accounts, “We were in a position where the right for Epiris at Park Resorts was add-ons. First general insurance and loans for small and next step for the company was in fact a sale came South Lakeland Park, held by Irish medium-sized enterprises. to a strategic like E*Trade. This investment bank NAMA. This was swiftly followed by a “The idea was to make Meilleurtaux a kind period was atypical for us, but the stars aligned pair of parks, Southview and Manor Park, of financial services supermarket with a lot for a deal with E*Trade sooner than anyone also from NAMA. of new products and services,” Jacqueau said. could have initially anticipated.” The final piece was the merger with When EQT rebranded the freshly-merged A source with knowledge of the transac- Alchemy Partners-owned Parkdean Holidays, UC4 and Orsyp as Automic, it took the oppor- tion said General Atlantic generated a gross which was not only geographically comple- tunity to reposition the business to a broader, internal rate of return above 60 percent. mentary but also “stronger on the holidays more high-level customer set. The idea was to did a re-IPO – a recap- side of the business, selling caravans for rental take a previously IT-centric business that sold italisation through the placement of new for a week or four days, whereas Park Resorts its products primarily to IT specialists within and existing shares – for NASDAQ-listed was much better at the sales side, selling a companies to automate certain processes plasma-based pharma company China Biologic caravan outright and then renting a pitch such as invoicing systems and turn it into a in 2015, raising more than $200 million. by the year,” Fortescue said. Following the business process automation company that Through this the firm introduced the op- merger, the combined business was renamed could help its clients with more complex portunity to institutional investors in the Parkdean Resorts. processes such as, for example, customer US and attracted big names such as Capital on-boarding at a telecoms business. World Investors and Fidelity Investments. BROADEN THE SCOPE “These companies came in as very im- These add-on acquisitions are often SECURE THE RIGHT EXIT portant investors and further diversified the perfect tool for companies that One thing we always ask firms the investor base of China Biologic, making 4are looking to broaden their prod- when we interview them for Deal it a truly ,” Warburg Pincus uct offerings. Such was the case for language 5Mechanic is how they knew it was managing director Min Fang said. services and technology company Appen, the right time to exit a business. Timing “Previously the company had no research which completed three acquisitions under the exit perfectly is crucial for securing a coverage, no liquidity, but after the re-IPO Sydney-based Anacacia Capital’s ownership. strong return. in 2015, it got research coverage by all the The first, US-based content relevance EQT – which had been approached on major banks such as Morgan Stanley, Merrill business Butler Hill, helped diversify the several occasions with expressions of inter- Lynch and Credit Suisse, thus improving company’s product and service offerings, est in Automic, particularly from strategic its liquidity from almost zero to nearly 10 increase customer touch points and expand buyers – set a “clear minimum value target million a day.” its geographic footprint. under which EQT was not prepared to sell”. By the end of 2015, the company had The second, social media business Wikman That led to a limited process which ran in a market value of more than $3.7 billion. Remer, allowed Appen’s commercial clients to the second half of 2016 and resulted in CA Warburg Pincus sold down its stake over localise their search engines and improve in- Technologies agreeing to acquire Automic in time and fully exited the company in August ternal website search functions. In September a deal valuing the business at €600 million. 2016, generating a return of 7x and an IRR 2016, the company acquired Mendip Media Because it manages separate accounts, of up to 60 percent. n

MAY 2018 PRIVATE EQUITY INTERNATIONAL 4 DEAL MECHANIC

SIMPLEX Driving US expansion

Simplex, a Tokyo-based fintech company, firm it was three years – from initial talks DEAL had an almost 20-year history, over 500 with Simplex CEO and president Hideki MECHANIC employees and close to 40 percent market Kaneko, to price negotiation and discus- UNDER THE BONNET OF share in Japan’s sell-side capital market sions on exit opportunities, to a nerve- A RECENT DEAL trading system when wracking 12-hour deadline to come back acquired a majority stake for an undisclosed with a new proposal after a rival bidder amount in August 2013. emerged on the scene. The company was also in the FinTech Carlyle Japan’s buyout 100, an annual global listing of leading tech- ACCELERATING GROWTH team led the charge on nology providers to banking and financial Post-acquisition, Simplex delisted improving the technology services companies. Simplex provided from the First Section of the Tokyo front-end dealing systems and middle-office Stock Exchange in October 2013 company’s efficiency risk management software mainly to Japa- 1and three months later had undergone a and boosting international nese mega banks and major securities firms, corporate reorganisation of its subsidiaries. growth, writes including Bank of Tokyo Mitsubishi UFJ, “When we bought the company our Carmela Mendoza Sumitomo Mitsui Banking Corporation and investment thesis was to grow the business Mizuho Bank. domestically, improve profitability, and then Eight of the 10 major securities compa- grow it overseas,” says Yamada. nies in Japan use the company’s products. The first priority for Carlyle was to Among its businesses, its retail FX services, make sure Simplex had a better under- which provide proprietary trading solutions standing of its clients’ needs and provided using a commission-based volume revenue the right solutions to their business – this model, were the largest revenue producer would allow them to identify which prod- for the company. ucts were generating the most revenue. “We knew from the beginning the com- Instead of waiting to receive requests for pany had an edge over its competitors,” quotations, Yamada says Simplex put staff Carlyle Japan managing director Kazuhiro on-site to work with clients on develop- Yamada tells Private Equity International. “We ing better systems. “Having staff on-site wanted to capture the upside in enhancing and engaging with its clients is Simplex’s company sales and improving its marketing uniqueness. To give an example, Simplex capability; Simplex has a great chance of helps core clients create a three-to-five-year becoming a global player.” system capex roadmap,” he says. It was also one of the last deals from the “It’s costly but a strategic way for us to firm’s second Japan buyout fund, Carlyle find out and better understand the needs Japan Partners II, a 2006-vintage vehicle of the clients. That strategy was well imple- that closed on ¥165.6 billion. mented at many of the top tier financial Like most negotiations in Japan, Yamada institutions, and Simplex is able to get more says the deal took years to complete. He business from them.” adds that because private equity is not as As a result, the firm started new services

Yamada: Simplex has a great chance of being mainstream in Japan as in the West, it takes including an equity and FX dark pool, which a global player time to build that level of trust. For the allows institutional investors to buy and sell

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During this process, Carlyle’s US tech- nology team reviewed Simplex’s overseas marketing strategy and introduced indus- try experts to the company. Subsequently, Simplex teamed up with a local partner in the US to expand sales and boost the devel- opment of new trading platform products for its next stage of growth.

IMPROVING GOVERNANCE Enhancing the corporate infra- structure was another value crea- tion initiative Carlyle focused on. 3Yamada says the firm asked Carlyle oper- ating executive Yasuo Nishiguchi, a former CEO of Kyocera Corporation, to act as an external director to enhance Simplex’s governance structure. “For 24 months, we worked together and highlighted the importance of cashflow and tightened cash- Simplex: provides FX margin trading solutions flow control by using our deal pipeline and KPI monitoring system.” large blocks of securities without show- Through these initiatives, Simplex’s net ing their hand to others and thus avoiding 25% income almost doubled in three years. market impact. Increase in revenue Along with governance, the firm also optimised Simplex’s business portfolio, LEVERAGING CARLYLE divesting its non-core subsidiary Virtualex One advantage of being in a global Consulting through an business network is having indus- 45% in June 2016. try experts on hand to help create Increase in EBITDA By the time Carlyle sold its shareholding 2value. Carlyle made use of this by leveraging back to company management in October the One Carlyle platform, its team of global 2016, the company’s revenue had increased experts, to support Simplex’s plans to gain 30% by 25 percent, EBITDA had grown to a foothold in the US. Increase in order backlog approximately 45 percent and its products “We brought Simplex’s manage- were being used across Asia. ment team to the US to collaborate and Yamada highlights that good people and exchange ideas with our US technology products are fundamental to Simplex’s suc- team and ex-CEOs of Carlyle portfolio cess. And he expects the company to grow companies, leveraging the One Carlyle its domestic base even further as more network for new business opportunities,” financial institutions in Japan are opening Yamada says. their systems to fintech. n

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ROCLA Sleeping giant

Mid-market firm Altus Capital Partners is Rocla was founded in 1986 and at the DEAL a niche manufacturing investor, so when it time of acquisition had manufacturing MECHANIC UNDER THE saw investments in the North American rail plants in Colorado, Delaware and Texas, BONNET OF industry increasing in 2012, the manage- and three major customers: freight com- A RECENT DEAL ment wanted to ride that trend. panies Burlington Northern Railroad and Its co-founder and managing partner, Union Pacific Railroad, and Amtrak in the Russ Greenberg, identifies three market transit market. Expansion had stalled under drivers that were important. Onshoring the previous ownership, but Altus believed Altus Capital Partners looked poised to bring manufacturing Rocla had potential to grow as its industry expanded Rocla's freight back to the US, and more goods were being g rew. capabilities to make it a delivered by intermodal transportation, “We had been looking for an invest- leading rail infrastructure which combines rail and road. Also, soaring ment opportunity in the rail infrastructure oil prices had driven a large rise in drilling space where we could work with a quality company. By Annabelle Ju in new areas of the country, which meant management team and help them build out a growth of transporting the fluid by rail. their business,” Greenberg says. Railway sleepers – or railroad ties as they are known in its home market – man- MAXIMISING MANUFACTURING ufacturer Rocla was being sold off in an Immediately after the deal closed, $12.4m auction conducted by boutique investment Altus invested a further $5.4 million Initial equity investment bank CoView Capital. With those drivers in to expand and meet the customer mind, Altus began negotiating and perform- 1needs at the plant in Colorado. Altus and the ing due diligence in a process that would management team also worked to secure a take almost a year. contract to build a plant in San Jose Itur- 5.4x “It took a long time to work through bide, Mexico, and another in Fort Pierce, Entry EV/EBITDA our due diligence questions because the Florida. company was transitioning its existing main Altus’s investment capital also supported plant in Denver to its new, larger location in two add-on acquisitions: Ohio-based rail- $44.5m Pueblo, Colorado,” says Greenberg. road manufacturer KSA, and an Arizona- Revenue on entry The deal was completed in May 2013, based plant from fellow manufacturer CXT. when the $200 million Altus Capital Part- “We needed something in the Midwest ners II purchased the company from the to fill out that part of the country to serve 1996-vintage CVC European Equity Part- more customers,” Greenberg says. “A con- $88.2m ners I for $12.4 million in equity, a 5.4x crete railroad tie weighs about 750 pounds Revenue on exit to EBITDA multiple. apiece. Rocla was producing close to two Average entry multiples for industrial million railroad ties a year. That’s a lot of of this size were between 5.4x and tonnage to transport, so you want to be 57.3% 6.0x in 2013, Greenberg recalls. closer to your customers.” Gross IRR Rocla’s management team invested alongside Altus, taking around a 15 per- PRIORITY ON PERSONNEL cent share. Part of Altus’s strategy is to keep The CVC fund was in wind-down the existing management team of ~4.5x mode and wanted to liquidate its remain- a portfolio company and require it Gross exit multiple ing investments, according to Greenberg. 2to invest alongside its fund. The team had

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CREATING NEW CUSTOMERS The plant Altus helped build in Mexico allowed Rocla to sign up Kansas City Southern Railway 3Company’s Mexican subsidiary as a client. According to Greenberg, half of Kansas City Southern’s revenue comes from its Mexican operation and it wanted to have a concrete tie supplier in the country to meet its needs. Rocla also added Florida-based real estate and railways company CSX Corpora- tion and Alberta-based Canadian Pacific Rail- way to its customer base, more than doubling the customers in the freight market. Freight customers make enormous orders compared with smaller transit cli- ents, Greenberg says, and about 70 percent of Rocla’s sales come from the former. The expansion drove a growth in revenue to $88 million when Altus exited. Having not made a rail investment before, Altus had to become comfortable with the cycles inherent in the industry. Activity depends on new projects or replac- ing existing infrastructure, rather than The ties that bind: Rocla executives visit the Colorado plant linear growth. “The demand can be volatile,” Green- been constrained by the previous owners, company DS Brown, which manufactures berg says. “That’s the challenge, understand- Greenberg says. rubber, steel and concrete products, as an ing the degrees of customer demand.” “Our investment thesis was to back its operating advisor in 2013. The same year, *** management team, who had been stifled Robert Rayner, who had sat on the boards In summer 2016, when Rocla had the larg- under its prior ownership from spending of several US-based manufacturing compa- est market share in North America, it was capital for growth,” he says. nies and served as president and chief oper- approached by several strategic buyers. The firm also raised more than $15 mil- ating officer of cement company Essroc, Altus hired investment bank Robert W lion of debt capital to fuel the growth in joined the board. Baird to co-ordinate discussions with poten- capacity and new plants. “Kirk and Robert assisted the manage- tial buyers. The sale closed with Germany- The overall headcount at the company ment team in terms of strategic discussions, based rail infrastructure supplier Vossloh grew organically as it added plants and determining execution risk and helping the Group on 4 January, generating a 57.3 bought competitors, and the senior execu- management with additional advice where percent gross internal rate of return and a tive level stayed the same. needed,” says Greenberg. money-on-money multiple of around 4.5x. The firm did, however, bring in two out- Altus stayed heavily involved with strate- “We had achieved our goals in terms siders. It hired Kirk Feuerbach, the chief gic planning, quarterly meetings and capital of growth and value creation,” Greenberg executive officer of Altus’s former portfolio approvals for the company. says. n marchMAY 2018 2017 PRIVATE EQUITY INTERNATIONAL private equity international 198 DEAL MECHANIC

WORLDMARK GROUP In the driver’s seat Melbourne-based WorldMark Group was a says Latham. “We collapsed profit and loss DEAL collection of about 10 separate businesses in accounts that were numerous into three MECHANIC UNDER THE the automotive aftermarket space and doing streamlined accounts (trade, consumer BONNET OF A$16 million ($12 million; €11 million) and international), changed the accounts A RECENT DEAL EBITDA when Malaysia-headquartered regime, and spent a lot of time with our Navis Capital Partners bought it in March portfolio directors in improving the oper- 2010. The company sold a gamut of prod- ating efficiency and the financial structure ucts and services – from window tint, car of the business, including streamlining Navis Capital Partners electronic systems and engine additives, to warehousing and logistics, and simplify- transformed and offering automotive sales consulting and ing financial and management reporting internationalised the building prison vehicles in western Aus- in Australia and internationally. That was Australian automotive tralia – and it needed a clear focus. the first thing we did.” company before sealing Phil Latham, senior partner and director of Navis Capital Australia, had a long history BOOSTING SALES a 3x exit through two with WorldMark, having first acquired the & EFFICIENCY trade sales, writes company in 1999 while at RMB Capital The second step was to zero in Carmela Mendoza Partners. After moving to Navis, Latham on specific initiatives such as re-approached the company in 2008 but 2building new sales channels and increas- the conditions post-global financial crisis ing efficiency. made it challenging to buy WorldMark. In Navis built WorldMark’s fleet leasing addition, car sales in Australia had fallen area and targeted fleets of vehicles around off a cliff, dropping 20 percent, so Navis the country that were either owned by withdrew its offer. Finally, in 2010, Latham corporates or leased by financial owners. made another offer and sealed the deal at Another initiative was to ramp up effi- A$110 million. ciency in logistics and warehousing. Latham says the firm brought in a Navis specialist ACHIEVING FOCUS in this field who decided to collapse World- Latham says the firm’s main priority Mark’s seven warehouses across Australia was to focus WorldMark’s business into four, reducing holding value by about into three divisions: trade, consumer A$10 million – an immediate cash release 1and international. on the company’s bottom line. Trade refers to sales in car dealerships. The firm also added telesales to exist- WorldMark sold its products and services ing face-to-face sales at dealerships, which to about 1,200 of Australia’s 1,600 car increased revenue by over 10 percent dealers, as well as through lease finance annually. In addition, Navis changed the companies and smash repair yards. In the management reporting structure. The firm consumer area, WorldMark ran a franchised brought in a new CFO, as well as a head network of about 100 shops called Tint a of fleets. Car. And in its international division, it had a John Weekley, one of the founders of global consulting and outsourcing company, WorldMark, became executive chairman Sewells Group, specialised in automotive of the company and spent time with Navis retail. in Kuala Lumpur and as Latham recalls, was Latham: Navis focused WorldMark on trade sales, consumer sales and international “That was a lot of work for us in terms “very aligned and involved in the business consulting of which business went into which bucket,” all the way through”.

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INTERNATIONAL EXPANSION The firm’s third main initiative was to focus on international growth, a Navis speciality. Latham 3says the firm looked at the Navis network and determined the best growth markets. “General Motors and Ford were opening car dealerships on a weekly basis in China. They were trying to pick the best spots, normally staffing them with 20 or more sales employees, and quite often these sales staff had no experience selling anything, let alone cars,” Latham says. “We realised that was a massive market for sales training efforts in China. That’s when we started to recruit a large number of trainers to teach sales people how to sell. This led to a mas- WorldMark: Asian network includes China, India, Thailand, Philippines and Indonesia sive growth for us.” On acquisition, WorldMark’s interna- “A lot of work went into the structure of because we knew them very well; they are tional division had 400 Australian staff and the business to get ready for sale. We then a reliable and honest firm and we knew we 20 employees in Asia. Its Asian footprint had looked at the potential universe of buyers. could do a quick deal with them.” just been Thailand and some aftermarket Several private equity firms were interested The sale of both businesses delivered pro- sales in South Korea and China, but at the and we had been approached three times by ceeds of A$300 million to Navis’s investors. time of exit, the company had 450 staff different private equity shops in Australia in Latham says that WorldMark’s inter- in China, India, Thailand, Philippines and the lead up to 2015,” Latham says. national growth was the most exciting Indonesia. Navis appointed two different advisors achievement for him and that Navis’s net- Navis also looked at India and decided – Greenhill for Sewells Group and Miles work enabled the company to grow inter- there was an opportunity to create a techni- Advisory for the core Australian division. nationally. cal sales division to teach mechanics how The firm had about 23 parties interested “A lot of companies have the ability to to do servicing on Indian two-wheelers in the business, from private equity firms to grow from one country to another but they and cars. Training mechanics was done in dealership suppliers and specialist automo- don’t have the confidence to do it. They partnership with the Indian government, tive service companies. are worried they are going to fail or won’t which supported the growth of technical The sale process for Sewells Group understand the economic climate in one training workshops in the country. The started in September 2015 and in April country versus another, and concerned they firm did one for Volkswagen in Chennai, the following year Detroit-based busi- won’t understand the cultural differences for instance, training large numbers of tech- ness process outsourcing company MSX and the language. nical apprentices in what eventually became International completed its acquisition for “And therefore great Australian compa- WorldMark’s technical training division. around A$60 million. nies are frightened about growing in coun- Meanwhile, 23 Australian and interna- tries such as China, Malaysia or Vietnam THE RIGHT EXIT tional parties were interested in the Aus- because they just don’t know what they It was clear to Navis that the tralian business. The firm, however, sold the don’t know. But Navis has a wonderful way international division and the business to Sydney-based Quadrant Private of saying: ‘We can help you, it’s not hard. Australia unit would not have the Equity for A$300 million in July 2016. You can learn from our people and you can 4same buyer so it decided to split the sales. Latham adds: “We decided on Quadrant grow your business in Asia’.” n

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CPA GLOBAL Copied right When Cinven acquired intellectual prop- London-based private equity firm Inter- DEAL erty business CPA Global in 2012, it hoped mediate Capital Group. MECHANIC UNDER THE to replicate the success it had achieved with “As is sometimes the case you see a BONNET OF its exit from transaction processor Ama- very attractive business but what’s on offer A RECENT DEAL deus the previous year. doesn’t square with what your mandate There were striking parallels between permits you to do,” says Stuart McAlpine, the two companies: both had originally managing partner at Cinven. been founded and owned by their custom- Patience is a virtue, and in late 2011 How Cinven replicated a ers and both boasted significant room for ICG agreed to sell a majority position to tried-and-tested approach technological growth. Cinven had earned a Cinven for around £950 million ($1.2 bil- in the patents industry. 7x return on its 2011 exit from Amadeus, lion; €1.1 billion). CPA Global marked the Alex Lynn reports which had been founded by a group of air- last investment from Cinven’s fourth fund, lines, after heavy investment in research a €6.5 billion 2006-vintage. and development, and saw similar potential within the patent renewals sector. SYSTEM UPGRADE “IP law firms had set up the company to Cinven’s strategy for CPA Global manage transaction processing activity [an was to continue to grow its renew- admin-heavy task] more efficiently than the als business while simultaneously law firms could do themselves, and they had 1building the efficacy of its software offering. also developed a nascent software offering,” The firm wanted to provide its customers Anthony Cardona, principal at Cinven, tells who were operating “in a kind of Heath Private Equity International. Robinson-type way with Excel spreadsheets “We saw an attractive market oppor- and manual interventions” with a tailored tunity: serving corporations and law firms software solution, McAlpine says. globally to help them manage their patents Although the company already had a dis- through technology. Every year the number parate range of software products, Cinven of patents has increased and it’s continuing hoped to build on this by creating additional to increase at a very strong rate as corpo- products and pursuing acquisitions, before rates and law firms want to protect their unifying these into a larger suite. innovation globally.” The acquisition of Austin-based IP 3x While patent drafting attracts much of search and analytics software provider Money multiple the credit in intellectual property, renewing Innography in 2015 catalysed the company’s these documents can be a laborious process technological development. In addition to complicated by the need to file, renew and boosting CPA’s range of software products, pay in multiple currencies and jurisdictions. Innography founder Tyron Stading joined as 24% Jersey-headquartered CPA Global was ini- chief data officer. CPA Global now boasts Internal rate of return tially set up as a co-operative venture of a single sign-on environment providing patent attorneys in which the workload was access to each of its products, as well as shared evenly across the group. a new web-based suite of IP management In 2010, CPA’s shareholders were keen software launched in June. to sell a minority stake in the business, €1bn and Cinven was interested. However, the BUY AND BUILD Capital gain for firm’s mandate required it to take control The second prong of CPA’s growth investors positions in portfolio companies and the strategy was to acquire renew- opportunity was instead snapped up by 2als portfolios within attractive 1118 private equity international PRIVATE EQUITY INTERNATIONAL novemberMAY 20172018 DEAL MECHANIC

in expensive cross-currency swaps for the duration of the loan. In 2013, the firm decided raising debt in dollars and euros would be a more natural fit for CPA’s increasingly global nature. Cinven fully refinanced CPA’s London- based debt from the previous year and replaced it with a New York covenant-lite dollar and euro first- and second-lien loan structure. The exercise generated a more diversified pool of lenders for the company that proved useful when it made subsequent acquisitions. The same year CPA refinanced its ini- tial mezzanine debt, reducing the weighted average cost of debt by nearly 2 percent. *** Working together: CPA Global was founded by its customers After five years of ownership, CPA had grown into the world’s leading patent renewal and markets and jurisdictions where the com- South Korea. The deal helped CPA become IP management software company with pany was under-represented, such as the the “number one player” in the South the likes of Microsoft, Canon and Unilever Nordics and Asia. The company made six Korean market, Cardona notes. among its 10,000-strong client base. additions funded through a mix of cashflow The company has also become the larg- As its holding period neared an end in and bank facilities. est IP services provider in China, taking early 2017, Cinven launched a dual-track In 2014, CPA Global acquired Sweden- advantage of the country’s exponential process with Goldman Sachs and JPMorgan based Patrafee IP services provider for an patent growth with offices in Shenzhen, to explore IPO and trade sale options. undisclosed sum. The deal included Patra- Beijing and Shanghai. The company attracted the attention of fee’s patent renewals business, IP manage- private equity firms “in the double-digits”, ment software products and UK operations. FINANCING says McAlpine, but a pre-emptive £2.4 bil- The same year saw CPA boost its search The firm’s acquisition of CPA lion offer from Leonard Green & Partners and analytics capabilities through the acqui- came amid some of the weakest proved too good to turn down. “The bids sition of Virginia-based international patent capital markets conditions since were very competitive, you got a sense services provider Landon IP, which held 3the recession. “It was one of the few LBO of the attractiveness of the asset and the offices in London, Shanghai and New Delhi. financings in the European market at that sector,” McAlpine says. It was these Asian markets that held the time,” Matthew Sabben-Clare, capital mar- “We arrived at a position over the week- highest potential for growth. kets partner at Cinven, adds. end where [Leonard Green & Partners] “[South Korea] is one of the most inno- The firm was able to secure underwrit- came forward with a value which was suf- vative economies in the world,” Cardona ing for a debt financing from some of its ficiently compelling for us not to go down says. “They have one of the highest levels relationship banks, in addition to placing a the IPO track,” McAlpine notes. of patents per capita of any economy, and mezzanine tranche with a combination of Cinven declined to comment on the the number of patents coming out of South its long-term institutional lenders and LPs. financial returns, but one market source Korea is growing very strongly.” Raising the necessary debt in sterling who asked not to be identified says the deal CPA attempted to tap into this momen- can be difficult as many institutional inves- generated a 3x money multiple, 24 percent tum with the acquisition of its former tors in leveraged loans are not funded in internal rate of return and a more than €1 renewals business partner, MarkPro, in sterling, explains Sabben-Clare, resulting billion capital gain for investors. n novemberMAY 2018 2017 PRIVATE EQUITY INTERNATIONAL private equity international 1912 DEAL MECHANIC

DEAL MECHANIC How Permira guided Netafim to becoming a global leader

We look under the bonnet this majority,” explains Torsten Vogt, Permira closed that unit and encouraged Netafim partner and co-head of the firm’s industrials executives to focus instead on strengthening of the private equity firm’s sector team. the service the company offered its original investment in a kibbutz- “In our mind, it was always important customers. oriented irrigation business. to be a clear majority owner and have the “We believed, and continue to believe that control to move this business, which was in the core of this business is irrigation, more a great place, to the next level.” than just drip irrigation, bringing irrigation At the time two local private equity firms technology to the world,” Vogt says. held a combined 30 percent stake. Three That renewed focus on customer needs kibbutzim also held positions in Netafim. led to pricing adjustments and changes to After both firms and one of the collectives existing products, some of which had not sold to Permira, Kibbutz Hatzerim, the larger been updated in 15 years. One example was of the two that remained, emerged as the the addition of a colour stripe on irrigation “kingmaker”, holding the equity the firm lines that eased the installation of the product needed to reach the majority position. for farmers across various markets. As would be the case throughout, Vogt Another important step was the creation says, acquiring the additional stake required of a cloud-based software platform providing Permira to address the very specific concerns crop-specific analytics as well as advice on of a business hoping to expand while retain- the selection of seeds and the application ing an ethos tied to Israel’s unique history. of fertilisers. Ultimately, it took 20 trips to the Negev The platform had the added benefit of Double-digit growth had first brought Ne- Desert over less than a year to secure the making Netafim more attractive to potential tafim to the attention of Permira’s industrials additional stake from the kibbutz, which buyers. “This was a very important element unit, but it was a call from the firm’s tech Vogt described as essentially a family with for all the strategics that looked into acquiring team that eventually led to an €800 million 400 members. the business,” he says. investment in the Israeli irrigation equip- “They had to be confident that we could ment provider in 2011. bring the right expertise, the right industry UPGRADING PERSONNEL The caller said that a contact had told understanding and also the right culture to With Netafim’s focus clearly de- them that there was an opportunity to gain transform it into a modern enterprise, while fined, Permira set about driving a a majority position within Netafim, whose still protecting the heritage and the interests 2cultural transformation, beginning owners included three kibbutzim, or collective of the founding kibbutzim,” Vogt says. with the management team. The firm re- agricultural communities. placed it entirely, except for the research Permira had identified water as one of REFOCUSING and development head. agriculture’s most attractive sub-sectors but Permira’s first task was to narrow “Effectively, the business had outgrown had previously been deterred by Netafim’s Netafim’s focus back to its irriga- its processes. It was a $700 million-plus crowded ownership. 1tion business. company at the time, but it had processes “Other private equity funds had been In 2007 and 2008, Netafim had acquired and a culture that suggested a $150 million around this asset, but we were the only greenhouse construction businesses focused to $200 million company,” Vogt says. ones that had all the ingredients to get to on Eastern Europe and Mexico. Permira “Kibbutz Hatzerim understood some of

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that challenge. They wanted to grow the EXPANSION IN GROWTH become the world’s second-largest irrigation business but giving up control is a tough MARKETS market. decision.” One of the key priorities for Here too, Vogt says, staffing was key. After a two-year search, in 2014 Netafim 3Maidan was overseeing Netafim’s Permira helped bring in Stephan Titze, who hired Ran Maidan, previously chief executive expansion in key growth markets, namely had been head of Swiss agrichemicals gro of Asia-Pacific, Africa and Middle East for China, Central America and parts of Africa. micro-irrigation market. crop-protection-focused Adama Agricultural While China was one of the 110 countries Here too the unique character of the Solutions, to be Netafim’s chief executive. in which Netafim already operated, the com- kibbutz shaped Permira’s exit. As part of “We found in him someone who shared pany had made many common mistakes there, the sale, Mexichem agreed to ensure that our vision and was capable, together with the Vogt says. After having technology stolen by a Netafim’s research and development will kibbutz, of driving the cultural transformation joint venture partner and having spent money continue to take place in Israel for the next necessary to accelerate some of those steps relocating within the country, Netafim was 20 years. n and position the company for what it is today.” reluctant to pay out any more in what had

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PARKDEAN RESORTS Out of the park

UK-based mid-market firm Epiris – for- FIRST STEPS DEAL merly known as Electra Partners – had been Epiris’ first task was to sit down MECHANIC UNDER THE keeping a close eye on the holiday parks with the management team to iden- BONNET OF sector for some time before it came across tify potential investment opportuni- A RECENT DEAL Park Resorts, an operator offering caravan 1ties to drive capacity across existing sites. holidays at 39 sites across the UK. “Because they had been so starved of “It’s a very resilient sector in terms of capital, that had to start from square one,” economic ups and downs, and we saw it as Fortescue says. Through an aggressive a high upside sector in terms of transfor- “They didn't have any view as to where programme of operational mation potential,” says managing partner those opportunities were, we had to go site improvements and M&A, Alex Fortescue. by site and look at where we could add Epiris transformed the “It’s still very fragmented, and so [it’s] a extra pitches or holiday caravans, how we stagnating caravan big M&A driven opportunity to drive growth, could drive capacity and growth.” and [there’s] still relatively high scope to This generated around 100 potential parks operator into a UK implement operational improvement.” projects which, due to the restructuring market leader, writes Park Resorts had been acquired by GI of the financing, Epiris could fund and see Isobel Markham Partners in a secondary buyout in 2007. a quick return to growth. Epiris also under- When Epiris looked at the business four took some succession planning; chief execu- years later, Lloyds Bank held a significant tive David Vaughan was looking to retire, chunk of the debt and was looking to exit. so Epiris worked to find a replacement, Epiris spotted an opportunity. appointing David Boden in 2013. “The thesis there was that, worst case, we would hold the debt to maturity. We BUILDING OUT £70m bought the debt at just over 50 pence in A large part of the value creation Initial investment the pound, and we thought we would make plan for Park Resorts was add-on somewhere between 1.7 and 2 times money acquisitions. Epiris had already simply from holding the debt to maturity.” 2identified a number of opportunities when In January 2012 Epiris paid £45.5 million it was evaluating the initial debt transaction. £32m ($56.3 million; €52.4 million) for Lloyds’ The first acquisition was South Lake- Entry EBITDA portion, and then picked up several more land Park, held by Irish bank NAMA, which debt tranches, taking the initial invest- Epiris acquired for just over £40 million. ment up to £70 million and giving the firm “The business had been going backwards a blocking minority. This allowed Epiris to operationally,” Fortescue says. £120m work with GI, the management team and “There, we implemented a very quick Exit EBITDA other banks on a consensual restructuring. turnaround programme to drive syner- “Essentially that involved extending the gies. We replaced the management team maturity of the debt, converting a piece and centralised it within the Park Resorts 3.9x of our debt into a PIK instrument and, business, and started driving the sales side Return crucially, us getting equity control of the of the business, which had been languishing business,” Fortescue says. under NAMA’s stewardship.” This meant Epiris’ effective entry price Epiris removed a head office and IT hub was around 7x EBITDA – considerably from the Lake District, moving it down to 46% below the market price for the sector of the Park Resorts headquarters in Hemel IRR 9.5-10x, Fortescue says. Hempstead, saving around £2 million.

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Shortly afterwards Epiris acquired a pair of parks, Southview and Manor Park, from NAMA, again at an attractive entry price.

CATCHING UP The caravan parks sector has gene- rally been behind similar indus- tries such as hotels and airlines on 3yield management, Fortescue explains. This was a clear area where significant, measur- able improvement could be made. “The old model had been to produce a catalogue that was mailed out and had the prices in it, you stuck to those prices for the season, and you might have a bit of clearance of unsold inventory at the last minute,” he says. Epiris worked with management to implement yield management software Child's play: Epiris implemented a buy-and-build strategy tools, allowing pricing to be adjusted minute by minute according to demand. Epiris approached Alchemy, which was balance sheet there, we’d taken it forwards, “That’s led to significant growth in receptive to the idea of a merger. The two restructured the balance sheet. We’d driven average pricing and has meant less dis- firms initially worked together with the two the M&A and driven the organic growth counting at the last minute as well,” CEOs and CFOs on integration planning and created now a £120 million EBITDA Fortescue adds. and synergies. “The conclusion of that con- business.” firmed the initial hypothesis that there was Epiris hired Rothschild in summer 2016 FINAL MERGER significant value in putting the two busi- to hold an auction process. The business was The final piece of the M&A story nesses together, partly from cost synergies, acquired by Canadian private equity firm was Park Resorts’ merger with but partly, and more interestingly, from best for £1.35 billion, which Alchemy Partners-owned Park- practice and the fact that each business had delivered proceeds of around £405 million 4dean Holidays. its own particular area of strength.” to Epiris’ major client, listed private equity “We’d always seen Parkdean as an inter- The merger was agreed in August 2015, investment trust Electra Private Equity, a esting M&A candidate for Park Resorts in and completed following competition clear- return of around 3.9x and an internal rate that it was geographically very complemen- ance in November. The combined business of return of around 46 percent. tary – Parkdean was much stronger in the was renamed Parkdean Resorts. “The fact that we’d bought the debt West Country, versus Park Resorts being *** meant that essentially we had no leverage much stronger on the south and the east Epiris continued making improvements working for us in this deal,” Fortescue says. coast,” Fortescue says. into 2016, until it became clear Parkdean “We were in the most senior instrument, “In addition, Parkdean was stronger at was ready to sell. which obviously meant it was a relatively the holidays side of the business, selling “We felt our core role was done, we’d lower risk deal for us, we couldn’t have lost caravans for rental for a week or four days, delivered that transformation, and it was our money, but also means delivering just whereas Park Resorts was much better at time to seek an exit,” Fortescue says. under four times money on an unlevered the sales side, selling a caravan outright and “We’d taken a business doing £30 million basis is a particularly strong return, we then renting a pitch by the year.” of profit; we’d taken essentially a distressed think.” n

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MEILLEURTAUX the deal, in the co-ordination of the due diligence, in the legal aspects, in the asset Getting the house in order and liability aspect.” Meilleurtaux also began a programme of Meilleurtaux was not a typical Equistone recovery plan for the business was to turn international expansion, establishing a pres- DEAL Partners Europe investment. In 2012, those agencies from subsidiaries into fran- ence in Morocco in 2015. Towards the end MECHANIC UNDER THE when HSBC was selling the mortgage chises. of Equistone’s holding period Meilleurtaux BONNET OF broker for French bank BCPE, it was “I would not say it was low-hanging acquired a minority stake in MelhorTaxa. A RECENT DEAL loss-making, and the business was only fruit, but it was something which was com, an online comparison and brokerage just breaking even when the deal was relatively easy to understand and not too firm in Brazil. completed in 2013. complex to implement,” Jacqueau says. *** But three key elements persuaded the As well as dramatically reducing cost, By this time, Equistone was being repeat- A strong brand name and firm Meilleurtaux was a good investment. franchising created a different, more posi- edly approached by potential buyers. a market with plenty of The first was the strength of the manage- tive dynamic. “The developments we set out to achieve room for growth enticed ment team, led by chief executive Hervé “The dynamic of franchises is much took less time than expected. When you Equistone to get behind Hatt. The second was the market oppor- more positive; people manage their agency have a lot of unsolicited approaches you tunity. like their own business because it is their Maison d’etre: the market share of mortgate brokers in France meant Equistone saw an opportunity come to a point where you just realise that the mortgage broker, “We were convinced there was a great own business, so they have an incentive to you have to be opportunistic,” Jacqueau says. writes Isobel Markham potential for this business in the French manage it as efficiently as possible.” paid off with visitors more than doubling “We came to the conclusion that it was market,” Equistone managing partner Guil- during the four-year investment period €16m probably the right timing to exit because laume Jacqueau tells Private Equity Interna- BUILDING ON THE BRAND to 26 million per year in 2016. Revenue on entry in four years we had made more than we tional. The strong brand meant Equis- expected. Hervé Hatt was comfortable with Jacqueau was particularly interested by tone could expand the number of GROWING THE PLATFORM the idea of taking the business into a new the fact that the market share of mortgage products and services the com- “When we announced the deal in phase of growth and it was, in his view, the brokers in France was just above 20 per- 2pany offered. 2013, Meilleurtaux was identified right timing.” cent, while in the UK it was more than “Hervé Hatt had been very clear from as a natural platform for consoli- €50m The auction process for the business Revenue on exit 60 percent. day one that he wanted to expand the ser- 3dation, so we received a lot of inbound attracted more than a dozen bidders. In the “Even if the UK market is much more vice and product offering,” Jacqueau says. investment opportunities,” Jacqueau says. end, the winner was Goldman Sachs, which mature than the French market, there was “The idea was to make Meilleurtaux a kind During the hold period, Meilleurtaux acquired the business in a deal understood such a gap between the two countries on of financial services supermarket with a lot completed five bolt-on acquisitions, which to value Meilleurtaux at around €260 mil- the market share of mortgage loan brokers of new products and services.” helped the company build out its product 111 lion. The investment bank used capital from that it was quite obvious to me that there During Equistone’s ownership, the com- offerings. Employees on entry West Street Capital Partners VII, which held was a great potential for this business in pany diversified from its original remit of The first, in 2014, was bank compari- a first close in December 2016 on $4.5 bil- The dynamic France.” selling just mortgages and loan insurance, son website Choisir-ma-banque. This was lion, and is its first buyout fund since 2007. of franchises The third attractive aspect was the and began to offer debt consolidation, con- followed by loan insurance comparator The transaction delivered a return to is much more strength of the Meilleurtaux brand name. sumer loans, bank accounts, general insur- and broker Multi-Impact and online debt 300 investors in the €1.5 billion Equistone Part- “It’s a great brand name with very high ance and loans for small and medium-sized consolidation specialist Préféo in January Employees on exit ners IV of 8.2x and a gross internal rate of positive; people manage brand awareness, known by almost every- enterprises. 2016 then insurance comparison website return of more than 70 percent. their agency like their one in France,” Jacqueau says. There was also significant growth in MerciHenri.com. All were rebranded under For Jacqueau, the investment confirmed own business because Equistone is understood to have invested Meilleurtaux’s core mortgage offering the Meilleurtaux banner. Equistone’s strategy of being open to invest €25 million to acquire BCPE’s 100 percent through developing the sales function and “I think we’ve been helpful in this 8.2x in complex situations. it is their own business, holding in Meilleurtaux in April 2013. expanding the customer base. Meilleurtaux context,” Jacqueau says. “Hervé Hatt is a Return “One should not forget that it was a so they have an incentive opened several new agencies across France, great professional who did not necessarily relatively high-risk transaction, it was a to manage it as efficiently FRANCHISING bringing the number up to 250. need our help understanding the business loss-making business when we bought it. as possible Meilleurtaux operated online Equistone worked with Hatt and his opportunity, but given our experience in Equistone is open to complexity and I think and through more than 200 high- team to optimise and improve the qual- M&A, we helped in the way we could set >70% it’s one of the positive aspects of our invest- Guillaume Jacqueau 1street agencies. A key part of Hatt’s ity of the company’s website. These efforts the price, in the way we could negotiate Gross IRR ment strategy,” he says. n 1722 private equity international PRIVATE EQUITY INTERNATIONAL juneMAY 20172018 june 2017 private equity international 23 DEAL MECHANIC

the deal, in the co-ordination of the due diligence, in the legal aspects, in the asset and liability aspect.” Meilleurtaux also began a programme of international expansion, establishing a pres- ence in Morocco in 2015. Towards the end of Equistone’s holding period Meilleurtaux acquired a minority stake in MelhorTaxa. com, an online comparison and brokerage firm in Brazil. *** By this time, Equistone was being repeat- edly approached by potential buyers. “The developments we set out to achieve took less time than expected. When you have a lot of unsolicited approaches you Maison d’etre: the market share of mortgate brokers in France meant Equistone saw an opportunity come to a point where you just realise that you have to be opportunistic,” Jacqueau says. paid off with visitors more than doubling “We came to the conclusion that it was during the four-year investment period €16m probably the right timing to exit because to 26 million per year in 2016. Revenue on entry in four years we had made more than we expected. Hervé Hatt was comfortable with GROWING THE PLATFORM the idea of taking the business into a new “When we announced the deal in phase of growth and it was, in his view, the 2013, Meilleurtaux was identified right timing.” as a natural platform for consoli- €50m The auction process for the business Revenue on exit 3dation, so we received a lot of inbound attracted more than a dozen bidders. In the investment opportunities,” Jacqueau says. end, the winner was Goldman Sachs, which During the hold period, Meilleurtaux acquired the business in a deal understood completed five bolt-on acquisitions, which to value Meilleurtaux at around €260 mil- helped the company build out its product 111 lion. The investment bank used capital from offerings. Employees on entry West Street Capital Partners VII, which held The first, in 2014, was bank compari- a first close in December 2016 on $4.5 bil- son website Choisir-ma-banque. This was lion, and is its first buyout fund since 2007. followed by loan insurance comparator The transaction delivered a return to and broker Multi-Impact and online debt 300 investors in the €1.5 billion Equistone Part- consolidation specialist Préféo in January Employees on exit ners IV of 8.2x and a gross internal rate of 2016 then insurance comparison website return of more than 70 percent. MerciHenri.com. All were rebranded under For Jacqueau, the investment confirmed the Meilleurtaux banner. Equistone’s strategy of being open to invest “I think we’ve been helpful in this 8.2x in complex situations. context,” Jacqueau says. “Hervé Hatt is a Return “One should not forget that it was a great professional who did not necessarily relatively high-risk transaction, it was a need our help understanding the business loss-making business when we bought it. opportunity, but given our experience in Equistone is open to complexity and I think M&A, we helped in the way we could set >70% it’s one of the positive aspects of our invest- the price, in the way we could negotiate Gross IRR ment strategy,” he says. n

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CHINA BIOLOGIC PRODUCTS Tapping the right vein

When biopharmaceuticals became a meant the valuation was lower than some The company increased its focused on with more than 130 sales representatives IMPROVING LIQUIDITY DEAL common conversation topic across War- of its peers. the supply-side of the business, but this also selling directly to more than 600 hospitals. Warburg did a re-IPO – a recapi- MECHANIC UNDER THE burg Pincus’s global healthcare team in From a less than 5 percent stake in 2010, entailed gaining government approval for In addition to opening more collection talisation through the placement BONNET OF 2009, Min Fang, a Beijing-based managing the firm took majority control of the com- plasma collection licences, which are dif- centres, the firm also engaged technical of new and existing shares – for A RECENT DEAL director at the firm, started research on pany, investing in multiple tranches until ficult to obtain in China. experts from China and the US to audit 4China Biologic in 2015, raising more than the China market. 2016. At its height, Warburg Pincus owned Fang said local governments were con- and improve the collection and manufac- $200 million. At the time, the production of drugs using nearly 45 percent of the company. cerned about the quality and safety stand- turing processes. Fang said the firm introduced the biotechnology was becoming a highly attrac- “We found this a great opportunity to ards of purely Chinese companies opening opportunity to institutional investors in the Over nearly seven years, tive sector globally and the Chinese govern- invest in an attractive business at a very collection centres. TRANSFORMING THROUGH US and attracted big names such as Capital Warburg more than ment was backing it in its 12th FiveYear Plan. attractive valuation,” Fang says. With Warburg as a major shareholder, M&A World Investors and Fidelity Investments. doubled EBITDA at China The minister of health pledged an additional the company built trust with the local Warburg also supported China “These companies came in as very impor- Biologic Products and $11.8 billion for biotech innovation. ENHANCING MANAGEMENT authorities and was granted a number of Biologic with acquisitions, such tant investors and further diversified the “For China Biologic Products, it was Its initial investment gave the firm new licences, which significantly increased 3as buying out minority shareholders in one investor base of the China Biologic, making created a booming plasma- similar to all deals we do – we started a seat on the board, where it had its raw material supply. of China Biologic’s subsidiaries, Guizhou it a truly public company.” based drugs company. from bottom-up research and found it discussions with other shareholders. This helped China Biologic become the Taibang. “It’s a very tough negotiation pro- He added: “Previously the company had Carmela Mendoza reports a solid business,” Fang says. “In terms of 1They found there was room for improve- second-largest plasma-based pharma com- cess because these businesses are doing well no research coverage, no liquidity, but after scale, it was one of the top two biopharma ment in terms of running and operating pany in the country based on 2014 sales, and it took us a lot of effort to convince the re-IPO in 2015, it got research cover- companies in China and one of the largest the business. commanding 17 percent of the domestic the minority shareholders to cash out. But age by all the major banks such as Morgan privately-owned players before we invested Fang tells Private Equity International it IVIG market. Its supply chain also expanded those deals are really accretive to the listed Stanley, Merrill Lynch and Credit Suisse, in it. Through our channel checks we also was important for the firm that the chief to 12 plasma collection centres and two company and helped incentivise the local thus improving its liquidity from almost found that its products had a good reputa- executive had a strong healthcare back- manufacturing centres across four provinces, management teams.” zero to nearly 10 million a day.” tion among local hospitals, physicians and ground. The company’s board replaced *** $170m customers. Chinese regulators also found China Biologic’s CEO at that time and hired By the end of 2015, the company had a Initial investment its manufacturing process had very good David Gao, which was recommended by market value of more than $3.7 billion. standards.” Warburg, to run the business in 2011. Gao Warburg sold down its stake over time Beijing-headquartered China Biologic is a serial entrepreneur who has been in and fully exited the company in August $66.5m Products collects human blood or plasma the sector for 10 years and has experience 2016, generating cash proceeds of about Entry EBITDA from stations across China. It then manu- running US-listed pharma company BMP $1.2 billion, a 7x return multiple and an factures products such as IVIG, which is Sunstone Corporation, from 2004 until its internal rate of return of up to 60 percent used to treat immune system conditions, acquisition by Sanofi in 2011. for its investors, Fang said. albumin for low protein levels due to sur- Gao had already worked with China Over a holding period of around seven $141.6m gery or liver failure and Factor VIII, an Biologic in a variety of roles, including years, China Biologic delivered 25 percent Exit EBITDA essential blood-clotting protein. as director chairman of its compensation to 30 percent gross earnings per share Warburg Pincus, which spends about committee. year-on-year. The company grew by almost 20 percent of its more than $44 billion eight times, with revenues growing from private equity portfolio on healthcare, FOCUSING ON SUPPLY $37 million in 2009 to $296 million in 7x made an initial investment of $170 mil- Because blood is a scarce resource, 2015 when Warburg began selling down Return lion in the company in 2009 from its $15 ensuring the steady supply and its stake. billion global buyout fund, Warburg Pincus quality of its raw material is key. The company continues to explore new Private Equity X. 2Fang pointed out that one of the key regions to expand its plasma collection China Biologic listed on NASDAQ in value drivers of the business is to open more coverage and introduce new products to 60% 2009 through a backdoor listing instead plasma collection centres, which gather raw the market, Gao said in a recent earnings IRR of a typical IPO process, which Fang says material for producing plasma products. Clean: quality is key for plasma collection and manufacturing call. n

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The company increased its focused on with more than 130 sales representatives IMPROVING LIQUIDITY the supply-side of the business, but this also selling directly to more than 600 hospitals. Warburg did a re-IPO – a recapi- entailed gaining government approval for In addition to opening more collection talisation through the placement plasma collection licences, which are dif- centres, the firm also engaged technical of new and existing shares – for ficult to obtain in China. experts from China and the US to audit 4China Biologic in 2015, raising more than Fang said local governments were con- and improve the collection and manufac- $200 million. cerned about the quality and safety stand- turing processes. Fang said the firm introduced the ards of purely Chinese companies opening opportunity to institutional investors in the collection centres. TRANSFORMING THROUGH US and attracted big names such as Capital With Warburg as a major shareholder, M&A World Investors and Fidelity Investments. the company built trust with the local Warburg also supported China “These companies came in as very impor- authorities and was granted a number of Biologic with acquisitions, such tant investors and further diversified the new licences, which significantly increased 3as buying out minority shareholders in one investor base of the China Biologic, making its raw material supply. of China Biologic’s subsidiaries, Guizhou it a truly public company.” This helped China Biologic become the Taibang. “It’s a very tough negotiation pro- He added: “Previously the company had second-largest plasma-based pharma com- cess because these businesses are doing well no research coverage, no liquidity, but after pany in the country based on 2014 sales, and it took us a lot of effort to convince the re-IPO in 2015, it got research cover- commanding 17 percent of the domestic the minority shareholders to cash out. But age by all the major banks such as Morgan IVIG market. Its supply chain also expanded those deals are really accretive to the listed Stanley, Merrill Lynch and Credit Suisse, to 12 plasma collection centres and two company and helped incentivise the local thus improving its liquidity from almost manufacturing centres across four provinces, management teams.” zero to nearly 10 million a day.” *** By the end of 2015, the company had a market value of more than $3.7 billion. Warburg sold down its stake over time and fully exited the company in August 2016, generating cash proceeds of about $1.2 billion, a 7x return multiple and an internal rate of return of up to 60 percent for its investors, Fang said. Over a holding period of around seven years, China Biologic delivered 25 percent to 30 percent gross earnings per share year-on-year. The company grew by almost eight times, with revenues growing from $37 million in 2009 to $296 million in 2015 when Warburg began selling down its stake. The company continues to explore new regions to expand its plasma collection coverage and introduce new products to the market, Gao said in a recent earnings Clean: quality is key for plasma collection and manufacturing call. n july/augustMAY 2018 2017 PRIVATE EQUITY INTERNATIONAL private equity international 2520 DEAL MECHANIC

ADAPT Business, reprogrammed

When UK mid-market firm Lyceum Capital eLINIA’s staff of 50 provided a “real DEAL acquired Adapt in September 2011 for an engine of technical people”, says Hitchcock, MECHANIC UNDER THE enterprise value of £30 million ($37 mil- who notes professionals with the same skill- BONNET OF lion; €35 million), its goal was to transform set were in short supply in London – and A RECENT DEAL the London-based colocation data centre expensive. Supported by recruitment grants business into one that offered managed from the Welsh government, London-based cloud services (MCS) at higher values and technical staff moved to Cardiff where the margins. team grew to 110 people over five years. By the time Lyceum Capital Before Lyceum’s £18.5 million initial “[The eLINIA acquisition] was the cor- exited cloud-hosting investment through a management buy-in nerstone of the transformation from a tech- business Adapt, the and a further £7.5 million of capital plugged nical capability and delivery point of view. It company had undergone in along the way, the business focused on saved us probably three years [of] building a reselling data centre space and networks team and capability,” Hitchcock says. a metamorphosis, as and only had three hosting clients. At that This was followed in June 2013 by the Victoria Robson reports time, MCS accounted for less than 10 per- purchase of Leeds-based cloud hosting cent of total sales. provider Sleek. The buy extended Adapt’s Lyceum had spotted a trend in the US client base to smaller businesses with more where businesses in the same sector were “nimble” hosting needs and allowed Adapt moving from selling data-centre space to to provide “a more flexible, lower-cost solu- owning servers and providing managed tion, which meant we could address a larger hosting services. “In 2010, that hadn’t really part of the market at a lower price point £3.7m manifested itself at scale in the UK,” says and then take some of those customers on EBITDA on entry Simon Hitchcock, Lyceum’s investment a journey to become larger”, Hitchcock says. partner on the Adapt deal. Through market mapping and talking GOING TO MARKET with “as many owners and chief executives With the technical capability in £10.1m in the sector that would take a meeting”, hand, the company could focus EBITDA on exit it became clear that hosting cloud services on its commercial strategy. While presented a huge opportunity. Lyceum iden- 2mapping the market the Lyceum team had tified cash-generative Adapt as the platform met Stewart Smythe, then at Cable & Wire- 3.2x through which to expand into a market that less Communications, who invested along- return was growing at 15-25 percent a year. side the GP and came on board in January 2012 as chief executive. SHAPE-SHIFTING “Stewart was fundamental to the strat- The acquisition of Cardiff-based egy and instrumental on the go-to-market <10% MCS business eLINIA in April 2012 side, positioning the business as being the sales made in managed cloud services for an enterprise value of £13 mil- best to look after mission-critical data, win- on entry 1lion kicked off Adapt’s makeover. “We saw ning the first landmark hosting client – who an opportunity to build a UK-managed frankly took a risk on our ability to deliver – hosting business and we knew that to do delivering well for them and then using case 70% that we needed to be able to position it to studies for the next client,” Hitchcock says. sales made in managed cloud services attract the right customers and have the Significant contracts included flower on exit technical ability to deliver,” says Hitchcock. delivery service Interflora and, later,

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LEGACY ISSUES Such significant business trans- formation was inevitably met with challenges. Foremost, mar- 4gins in the original colocation data centre business contracted more rapidly than anticipated. “The hosting business outperformed our expectations and the colocation reselling, which we thought was a stable business, underperformed,” says Hitchcock. “At one point we’d got a business where one side [MCS] was growing at 40 per- cent a year, but the other side was declining. Managing and understanding that dynamic was something the management had to deal with. It was the key challenge.” The disparity meant Adapt took longer Fresh servers: tech acquisitions helped Adapt shift its focus to the cloud to reach the £10 million EBITDA thresh- old at which Lyceum planned to sell, and convenience food retailer Greencore Group. Hitchcock. “There was a lot of change in the GP’s exit was delayed by a year to 18 As the demand for managed host- the business over the five years and we months. ing became more established “it became were invested in getting it right. Working *** about having a really efficient sales and with the CEO we had to change a couple By exit, the heavy lifting was done and man- lead generation machine, and consistent of members of the management team and aged cloud services represented closer to first-class delivery”, says Hitchcock. To that strengthen the team with additional roles.” 70 percent of sales. Adapt had also expanded end, Adapt brought in an additional non- Keeping ahead of market trends its MCS market share from £300,000 a executive board member to sharpen the remained a theme. Two and half years ago, month in September 2011 to more than commercial effort based in London. on a visit to the US, Hitchcock and Smythe £3.4 million by July 2016, with revenues recognised more hosting clients were for the sector growing 20 percent in the MAKING IT SEAMLESS using hyperscalers – which accommodate last year of investment. The CEO’s ability to “knit it all increasing computing demands – for some Annual revenue grew from £32 mil- together” was key to the suc- of their applications, and Amazon Web Ser- lion for the year ending 30 June 2011 to cess of the business, says Hitch- vices was leading the charge. £45 million in June 2016, and EBITDA from 3cock. “Adapt was a buy-in with M&A in Anticipating future client needs, Adapt £3.7 million to £10.1 million. Employee an emerging and growing market. Making hired a technical team to support its AWS numbers had swelled from 100 to 210. the whole thing work so the client delivery offering and funded the development of Following an off-market approach at was really excellent was key to success.” a platform. By the time of exit in August a premium to other interested parties, The company was a service business 2017, its first two customers had gone live. US-managed hosting and cloud services and the technology was “pretty standard” “AWS was a reaction to what was happen- provider Datapipe, in which Abry Partners and less of a challenge than getting right ing the market, a natural evolution,” says is an investor, acquired the company. The the “service wrap” – the people, systems Hitchcock. “The buyer [Datapipe] has quite sale generated a money multiple of 3.2x and processes that hung around it – says a large AWS business, so that will continue.” for Lyceum. n

februaryMAY 2018 2017 PRIVATE EQUITY INTERNATIONAL private equity international 1922 October 17-18 | Convene Conference Center – Midtown West Registration now open

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