Nottingham RegTech Ideagen has been sold for £1.1 billion.
The acquisitive compliance software giant has been taken over by London-based private equity firm Hg Pooled Management following 12 consecutive years of growth.
London-listed Ideagen had recommended the offer from Hg to its shareholders.
Now Rainforest Bidco Limited, a newly-incorporated wholly-owned subsidiary of funds managed by Hg, is to complete the acquisition “through a court-sanctioned scheme of arrangement and remains subject to sanction by the court”.
“This is incredibly exciting news for Ideagen. Hg share our values and our ambition, whilst their operational experience in software has successfully helped businesses to accomplish their goals many times over,” said Ideagen CEO Ben Dorks.
Ideagen’s software helps companies comply with regulation and manage risk. It serves more than 8,000 customers, including Heineken, British Airways, the US Navy, the Bank of New York and the European Central Bank.
It counts seven of the UK’s top 10 accounting firms, three quarters of the world’s biggest pharmaceutical companies and all of the world’s top aerospace and defence companies among its client base.
“This new relationship will give us the ability to accelerate even faster, serve our customers better and scale our business further across the globe,” added Dorks.
“I want to take the opportunity to thank those at the heart of our success, including our colleagues around the globe working hard to provide trusted software solutions that help protect organisations, as well as tens of thousands of customers we work with.
“We are on an exciting journey of growth and progression, one that continues to deliver solutions to help improve operational efficiency, maintain compliance, manage risk and keep people safe.”
Ideagen raised an almost £100m M&A war chest late last year. Strategic acquisitions saw it grow revenue 41% to £92.2m in the year ended 30th April, with adjusted EBITDA up 33% to approximately £30.5m.
A huge 86% of those revenues – £78.9m – are recurring on an annual basis with customers. Its impressive figures attracted a flurry of takeover interest, with several suitors coming forward in April.
Hg, a software and services investor with more than 20 years of industry experience in building and rapidly growing innovative software businesses – including UK-based businesses such as IRIS Software Group and The Access Group – provides technology experience and operational support to management teams looking to scale.
It has a current portfolio of more than 45 software and technology businesses, representing over 55,000 employees globally.
“We are delighted that Ideagen’s shareholders have voted in favour of this partnership with Hg. We have long recognised Ideagen as a high-quality software business and are excited about the future,” said partners Christopher Fielding, Joris Van Gool and Jean-Baptiste Brian.
“Ben and the team will now have greater flexibility to execute and accelerate longer term growth plans, including investments in product, technology, talent and large scale, accretive M&A.
“Together we are in a great position and remain committed to ensure that Ideagen maintains and grows as a leader in the sector.”
Speaking to BusinessCloud before the takeover approaches, Dorks told BusinessCloud: “I expect us to continue our twin focus strategy of organic growth and making acquisitions.
“We raised £100m just before Christmas so we have a balance sheet that supports us in further acquisitions this year. And I’ll be very disappointed if we’ve not grown the business substantially during the next 12 months.
“We’re quite public about our vision: we want to be a £200 million ARR business by 2025 and therefore the businesses we acquire are very clear on what their part of that looks like. And that’s a really important part of our purpose and vision.”