Deal in Focus: Main Capital boosts software drive with Ymor

As September was drawing to a close, Main Capital Partners announced it had bought a majority stake in Netherlands-based application-monitoring service Ymor.

The investment figure made by Main Capital remains confidential, but the GP's earlier funds have typically deployed an average €5-10m per deal.

Speaking to unquote", a source familiar with the situation placed Ymor's enterprise value above the €10m threshold. According to the same source, Main Capital secured control of the business by picking up a stake in excess of 60%. Meanwhile, the company's management, led by Martin van den Verge, co-invested to keep a 35-40% interest.

The takeover was leveraged at 50%, with a debt facility provided by Rabobank and arranged by Main Capital's in-house corporate finance arm. Equity came via the GP's third and fourth buyout funds, which have been seeking software assets in Benelux and Germany since their respective launches in September 2011 and May 2015.

Main Capital's fourth fund closed a month prior to the deal, with commitments reaching the €85m hard-cap. Main Capital I has so far been deployed exclusively in the Benelux region, although a third of all commitments are earmarked for Germany. Its three deals to date include the buyouts of Roxit and Ymor, as well as the bolt-on of Green Valley by Roxit in October.

Testing times
Founded in 2003, Ymor is a software provider specialising in application performance monitoring (APM) and IT operations analytics (ITOA). Via its Ymonitor suite, the business runs stress tests, performance measurements and troubleshooting for applications from clients such as Ziggo, KPN, Eneco, the port of Rotterdam and Dutch Railways.

Headquartered in Utrecht, Ymor employs more than 80 professionals. Although revenues for the company remain undisclosed, Main Capital seeks assets generating sales in the €4-15m region.

With Main Capital as new majority shareholder, the software developer is looking to strengthen its foothold in the critical chain monitoring market, both in its Netherlands base and abroad. This will be accomplished by building upon existing partnerships and reselling agreements.

The company expects increased interest in the APM sector as the rise in cloud-based technologies and the outsourcing of IT teams increases the pressure on those managing IT chains. According to the company's research, those trends have resulted in an annual 16% growth for APM businesses.

Build-up focus
As a GP, Main Capital focuses on majority buyouts for software businesses, a "logical approach" given the industry's size and maturity, according to the firm.

The strategy features a strong build-up component, a theme observed both for Ymor and Roxit. The latter, a Zwolle-based licensing and planning software specialist, was bought by Main Capital in late June and represented the largest deal for the firm to date.

Following the takeover, a build-up strategy was announced for Roxit; the first bolt-on came in early October, with the purchase and subsequent merger with fellow developer Green Valley.

Having divested developers VisionWaves and Zetacom in 2015, Main Capital looks set to add new names to its portfolio before year-end. Another add-on is expected for Q4, as is a new investment via the fourth fund, unquote" understands.

People
Main Capital Partners – Pieter van Bodegraven, Charly Zwemstra
Ymor – Martin van den Verge

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