2016 – Page 2

LIVINGBRIDGE RAISES £660M TO INVEST IN UK SMES

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Livingbridge has successfully raised £660m, its largest fundraise to date, which it will focus on investing in SMEs across the UK.

The fund, Livingbridge’s eighth since it was founded in 1995, will invest in growth equity or buyout transactions of entrepreneurial, high growth companies predominantly in the UK. The fund will focus on investing in companies with enterprise values typically between £20m and £75m across a variety of sectors ranging from business and financial services to TMT, consumer markets and healthcare & education.

Known as Livingbridge 6, the fund has a diversified and global investor base with Limited Partners from across the UK, Europe, and America drawn from insurance companies, public and corporate pension funds, fund of funds and family offices.

The successful fundraise caps a busy period of activity for Livingbridge which saw the firm complete its 100th investment in April this year following the management buyout of Thomas J Fudges, a 100-year-old family business selling premium biscuits.

In total, Livingbridge has completed eight transactions since the start of the year, investing in businesses such as Southern Communications, one of the UK’s most established telecommunications business, digital recruitment specialist Up Group, and Direct Ferries, the world’s largest online ferry ticket aggregator. It has also successfully exited businesses such as corporate travel agent Reed & MacKay, IT infrastructure services provider Onyx and Frank Recruitment Group, a global staffing business.

This latest fundraise follows Livingbridge’s successful close of its Enterprise 2 fund in September 2015, which raised £220m to invest in smaller SMEs. Overall the Livingbridge platform is able to provide equity funding of £2m to £40m to companies of a range of sizes, specialising in supporting the management teams of fast growth businesses.

Wol Kolade, Managing Partner at Livingbridge said:
“We are delighted to have secured the support of such a high quality international investor base. This is testament to both our strong track record and the significant opportunity that exists to deliver excellent returns backing fast growth UK SMEs. The EU referendum result may have injected a degree of uncertainty into the UK economy but SMEs and entrepreneurs have proven time and time again that they are able to adapt and thrive in precisely this sort of environment.”

FSN’S INSTALCO BOOSTS OPERATIONS IN NORWAY & SWEDEN WITH ADD-ON ACQUISITIONS

Instalco Group, a portfolio company of FSN Capital IV,has continued to execute on its growth strategy by making four additional add-on acquisitions – TIMAB (SE), Rørteft (NO), Dalab (SE) and Installatör AB (SE). The acquisitions are consistent with Instalco’s strategy of establishing a complete national presence in Sweden and strengthen operations in the Oslo area in Norway

TIMAB
TIMAB offers a full service portfolio of HVAC, electrical and heating & plumbing installation solutions for food retailers in the Stockholm area (Sweden). The company was founded in 2004 and has sales of SEK 65 million.

Rørteft
A supplier of heating & plumbing installation services in the Olso area (Norway). Rørteft primarily offers heating & plumbing installation for residential housing. It was founded in 2007 and currently employs 24 people. The company has a turnover of NOK 51 million.

Dalab
Dalab is a leading supplier of HVAC and heating & plumbing installation services in the region around Dalarna in Sweden. The company has 45 employees and offers services for both new projects and modernization. Dalab has a turnover of SEK 93 million.

VVS-Installatör
A heating and plumbing company with over 50 years of experience in the region around Dalarna, Sweden. Operations include installation for new projects as well as modernization of residential buildings, schools and commercial buildings. The company has a turnover of SEK 46 million and employs 45 individuals.

Following the acquisitions, Instalco Group has operations in 3 countries and has estimated run rate LTM sales of SEK 2.4 billion as of July 2016.

LIVINGBRIDGE INVESTS IN CLINICAL CONSULTING BUSINESS FOUR EYES INSIGHT

Livingbridge has invested in the clinical consulting business Four Eyes Insight and will work with the founders to accelerate growth over the next few years. The investment was made from the Livingbridge Enterprise 2 fund.

Four Eyes Insight was founded in 2013 by Dr Henry Carleton and Brian Wells. Leveraging the founders’ clinical experience, the business helps acute NHS trusts across the country identify and implement efficiency and performance improvement projects.The business’s services are in high demand due to the significant funding pressure placed on NHS England. A requirement to find £22bn of annualised efficiency savings by 2020/21 is necessary to overcome the impending funding shortfall. Nearly 60% of the NHS’s budget is directed to acute trusts and as a consequence they are experiencing the greatest share of efficiency saving pressures. Four Eyes Insight’s clinical productivity consulting assists trusts in realising savings.

Drawing on the team’s clinical expertise, the business is able to bring to bear market leading modelling and workflow management techniques for trusts such as The Princess Alexandra Hospital Trust, Croydon Health Services Trust and Central Manchester University Hospitals Trust. In each case Four Eyes Insight have helped these trusts and others to achieve tangible improvements in clinical efficiency and reduced patient waiting times.

Four Eyes Insight has worked with more than thirty NHS acute trusts over the last three years and on each occasion has been able to demonstrate lasting productivity improvements which are highly valued by trust management and the regulator, NHSI.

The investment from Livingbridge will see Four Eyes Insight be able to invest further in internal processes and infrastructure and add additional senior talent with a longer term goal to grow the business’s total headcount from approximately thirty to sixty by 2018. There are also plans for further investment in proprietary software and the development of additional services for the NHS.

Following the investment Pete Clarke and Louise Kingston from Livingbridge will join the board.

Dr Henry Carleton, co-founder and CEO at Four Eyes Insight, commented:

“Since our inception just over three years ago, we have worked hard to establish ourselves as a key partner for the Trusts we work with, turning medical productivity plans into an operational reality and helping them to achieve significant efficiency gains and cost savings. Growing our team will now be a primary focus for the business and we are actively recruiting across all areas of the firm as we look to build on the strong momentum we have generated to date.”

Pete Clarke, Partner at Livingbridge said:

“Livingbridge has a track record of working successfully with consultancy businesses and companies working with the NHS so Four Eyes Insight is in our sweetspot. We are very excited about working with such a passionate and well respected management team and see significant growth potential for the business. We will look to invest further in the products, services and software solutions for the NHS, given the constrained funding backdrop and the great work that the team do to help NHS Trusts ‘achieve more with less’”

LIVINGBRIDGE EXITS CORPORATE TRAVEL MANAGEMENT COMPANY REED & MACKAY

Livingbridge and ECI Partners (‘ECI’) have announced the sale of Reed &
Mackay to Inflexion generating a multiple of 3.4x cost to investors.

Reed & Mackay is a premium corporate travel management company delivering a personalised service through cutting edge technology. Its strategic travel management services focus on law firms, insurance companies, finance houses and the Energy Sector. More recently it has opened offices in Scotland, the US and the UAE. Reed & Mackay also provides an industry leading Event Management service. In the year to March 2016 Reed & Mackay handled nearly 600,000 client travel transactions.

Livingbridge first invested in Reed & Mackay in 2005 before undertaking a reinvestment with ECI in April 2011. Over this period the business has been transformed through investment in people and technology and has delivered consistent, profitable growth. Since the reinvestment in 2011 highlights include:

The client base has grown over 68% (a CAGR of 14%) to nearly 500;
A 97% client retention rate demonstrating the high quality service and value that the whole team at Reed & Mackay delivers daily to its clients;
Total transaction value passed £200m for the first time in 2014 and is set to reach almost £250m in 2016;
EBITDA has more than doubled, growing at a CAGR of 15% over the last 5 years;
Employment has grown from c.250 in 2011 to what will exceed 400 by the end of 2016;
Development of proprietary technology tools including a market leading online booking tool, traveller app and travel risk management platform;
Wholly owned offices opened in Scotland, the US and the UAE, further enhancing the platform for international growth.

The business is now ideally placed to take its market leading service proposition to an increasingly international audience with support and funding from Inflexion.

Fred Stratford, CEO at Reed & Mackay commented: “It has been an enjoyable and rewarding few years working with ECI and Livingbridge to help strengthen Reed & Mackay’s International footprint and to develop the value proposition in line with client demand. We have achieved a huge amount together and now I look forward to working with Gareth Healy, Mark Williams and the team at Inflexion on our next phase of growth.”

Chris Watt, at ECI, commented: “We wish the team every success for the future. It has been a pleasure working with Fred, his team at Reed & Mackay and Shani at Livingbridge, over the past five years and to see the company develop into a world class business that is genuinely differentiated in its field.”

Shani Zindel, at Livingbridge, commented: “It has been fantastic to have been part of the Reed & Mackay growth story over the last 11 years, a period that has seen them flourish as a market leader in strategic travel management for blue chip organisations. We have been proud to partner with Reed & Mackay over this period, and it’s been a pleasure to work with ECI since 2011. We wish the Reed & Mackay team the greatest success for the future.”

CAPITON EXITS FLEXIBLE PACKAGING BUSINESS SCHUR FLEXIBLES TO LINDSAY GOLDBERG AND MANAGEMENT

The Schur Flexibles Group, headquartered in Baden, Austria is a European market leader in the flexible packaging industry. The company was created over the past five years by capiton and the CEO and co-owner Jakob A. Mosser, in the context of a buy-and-build concept.

schur-flex

Today, the group consists of twelve companies with eleven production sites in Germany, Finland, Denmark, Holland, Poland, Slovakia and Greece. In 2015, the group generated sales of almost € 370 million and employed more than 1100 staff.

The product portfol schur-pictures io of the company consists of specialized high value added flexible packaging solutions for the food, tobacco and pharmaceutical markets. The company also covers the entire value chain of the packaging industry, from raw material sourcing to extrusion, printing, lamination and converting.

capiton acquired the first company of the group, CFS Dixie GmbH, in December 2011. The nucleus of the group was then purchased in early 2012 with the take-over of the Schur Flexibles Division (four companies) from Schur International (Denmark). Five further businesses were acquired until the end of 2014 to create the Flexibles business that exists today. In 2014 PS Polymer Sourcing, Warburg Germany was founded as an additional separate business unit.

As part of the share sale signed now, the shareholders of Schur Flexibles have sold their shareholdings to Lindsay Goldberg, represented in Europe by Lindsay Goldberg Vogel, and the management team. The new owners intend to continue the successful buy and build concept through the acquisition of further target companies, some of which have already been identified.

CAPITON EXITS PREMIUM TEXTILE MANUFACTURER POLI-TAPE GROUP TO BITBURGER HOLDING

POLI-TAPE is a globally leading, innovative manufacturer of premium textile transfer foils and foils for plotting, lamination and digital printing. POLI-TAPE Klebefolien GmbH in Remagen and its subsidiaries in the USA and Italy are part of the POLI-TAPE Group.

The company has enjoyed constant growth over recent years. Following extensive investment, primarily in production, turnover has been increased by more than 50% during capiton’s period of involvement.

capiton acquired a minority interest in the POLI-TAPE Group in March 2011.

With the transaction now been signed, capiton is selling its shareholding in the POLI-TAPE Group to Bitburger Holding. The transaction is still subject to the approval of the antitrust authorities. The parties have also agreed not to disclose further details of the transaction.

INNOVA INVESTS IN POLSKIE EPLATNOSCI

Innova Capital, a leading Central European private equity firm, together with its partner, OPTeam, which is listed on the Warsaw Stock Exchange, has invested in Polskie ePłatności (“PeP”). Thus, PeP will become a platform for the consolidation of the electronic payments sector in Poland. The transaction is another important investment by Innova in new technologies and financial services.

“In our investment strategy, we are consistently increasing our commitment in entities with a distinct technology DNA and a market position that opens the route for expansion and rapid growth. FinTech, a sector which combines financial services with state-of-the-art technologies, is not only a sector with a positive outlook, but also a well-known terrain for us. We have successfully made investments in the electronic payments market in such companies as Polcard (now FirstData), Euronet and Provus. PeP is a company in which we can see similar potential,” says Krzysztof Kulig, Managing Partner, Innova Capital.

“We believe our experience and equity commitment will support PeP’s management board in implementing an ambitious growth strategy. We also want to consolidate further entities into a strong group” says Marcin Drozdowski, Managing Director, Innova Capital.

After the transaction closing and the capital injection into the company, within the framework of their strategic partnership, Innova and OPTeam will actively support the management board of PeP in the consolidation of the electronic payments market, both through further acquisitions and organic growth.

“PeP is one of the pioneers of the electronic payments market. The company was one of the precursors, launching contactless payments in Poland and has a significant share of the market. I believe that, together with Innova Capital, we shall create an entity that will soon become a leading clearing agent and the undisputed leader of e-payments in Poland,” emphasizes Wacław Szary, President of the Management Board of OPTeam S.A.

INNOVA AWARDED AT INVESTMENT FORUM & PRIVATE EQUITY GALA

Another edition of the prestigious “Investment Forum & Private Equity Awards Gala” conference, bringing together the leaders of investment markets, took place on June 6 at the Westin hotel in Warsaw. For the seventh time the leading representatives of the private equity sector discussed the future of the sector and the most important issues for Polish companies and investors. The conference was organized by Executive Club under the patronage of the Polish Private Equity and Venture Capital Association.

The conference gained the status of the most important event on investments and Private Equity in Poland and has been attracting leaders of investment markets, top management of the largest Polish companies, as well as investors and entrepreneurs for years. The invited speakers, most renowned representatives of the industry, debated among others, on the possibilities of acquiring capital for global development and long-range perspectives for the export directions of domestic companies.

The results of the fifth edition of the “Private Equity Diamonds” Competition in 2016 gave Innova Capital two prizes in the following categories:

PE Portfolio Company of 2015– Grupa Wirtualna Polska

Fund of the Year 2015– Innova Capital

INNOVA EXITS BATHROOM MARBLE PRODUCER MARMITE TO CRANEMERE LTD

On 12 May 2016 Innova together with other minority shareholders sold their stakes in Marmite – the leading European cast marble sanitary ware manufacturer – to Cranemere Ltd. in one of the biggest deals in Poland this year.

Innova purchased a controlling stake in gfx_logo Marmite from its founder Roger Johansson, in 2010. Under the leadership of CEO Robert Rutkowski and his team, the Company pursued its strategy of European expansion, product and material innovation and operating improvements, further extending its leadership position on the European market.

Business transformation and founder succession

During its holding period Innova helped steer through the transition from founder to a world-class management team. During 2010-2016 Marmite built a pan-European sales force, improved productivity and capacity in its Poznan production plant, and developed a top-class design capability recognized by the international iF, Red Dot and AꞋDesign Awards.

With ca. EUR 50m of annual sales and the majority of its products sold for export, Marmite is the leading European producer of cast marble sanitary ware and the only supplier capable of meeting the highest standards of the largest and most demanding European customers in terms of volume, quality and just-in-time delivery. “Marmite is a truly world class company, headquartered here in Poland. We are delighted.” said Olivier Weddrien – Head of Cranemere’s European activities. “Innova seeks high-value-added manufacturing businesses that can establish leadership not just in Poland, but across Europe. We are therefore very proud of what has been achieved by Marmite” responds Rob Conn, Innova’s Founding Partner.

This is the 9th Founder Succession deal in which Innova takes a majority stake and partners with business founders to build their company “to the next level”. “Innova was my partner of choice, and I am very happy with our partnership and what has been achieved over the last five years”, said Roger Johansson, Marmite’s founder.

Exit

Cranemere Ltd. purchased a 100% stake in the Company.

About Marmite

Marmite is the leading European manufacturer of washbasins, shower trays and bathtubs made of cast marble. The company brings together natural mineral materials, sophisticated technology and develops efficient cast marble innovations. Marmite has 40 years of industry experience, hires over 550 employees and uses its 7 fully organized production lines with a total capacity of 1.4m units/year to manufacture products for more than 200 clients from nearly 40 different countries.

LIVINGBRIDGE INVESTS IN TELECOMS SPECIALIST SOUTHERN COMMUNICATIONS

Livingbridge dials up investment in telecoms specialist

Livingbridge has invested in Southern Communications, one of the UK’s oldest telecoms firms which can trace its roots back to 1965.

Today, Southern Communications provides
SME businesses across the UK with a range of services including fixed-line, data, mobile and cloud based services alongside sale, installation and maintenance of telephone systems.

Over the past three years, Southern Communications has completed the acquisition of eight businesses, transforming itself into one of the UK’s largest providers of business-to-business telecoms services in the UK with turnover of over £30 million, over 6,600 business customers and a workforce of over 160 employees operating from four locations in the UK.

Livingbridge have taken a minority stake in the business and, following the investment, will work with the management team to help grow the customer base, introduce new product lines and services and execute strategic acquisitions to augment the firm’s organic growth plans.

As part of the transaction, the business has also secured a new, £36 million loan facility from Santander and HSBC. In addition, David Goldie, former CEO of TalkTalk, will join the business as Chairman and work alongside Paul Bradford, CEO, who originally joined the Group in 1995 and led a management buyout of the firm in 2002.

Livingbridge is an experienced TMT investor and Southern Communications will join a portfolio which includes IT and managed services provider CableCom, internet services provider Metronet and call recording software business Redbox Recorders..

Paul Bradford, CEO, Southern Communications, said: “I am really excited about working with both Livingbridge and David Goldie to continue the Southern Communications journey. David brings with him significant experience having acquired over 40 businesses during his time at TalkTalk and, alongside the investment from Livingbridge, I feel like we have secured the perfect team to drive our ongoing development. This investment will provide us with significant firepower to acquire complimentary businesses as we seek to build on the strong momentum we have generated and move towards our stated aim of doubling in size over the next three to five years.”

Matthew Caffrey at Livingbridge said: “Southern Communications has a strong and consistent track record of both organic and acquisitive growth and has a fantastically well positioned product portfolio to service SMEs IT service and telecommunications needs. They are a real market leader in their field with recurring revenues of more than 90% and an industry leading customer retention rate. We’re looking forward to working with Paul and the team and helping them build on the strong progress the business has made to date.”