Paragon sells NovumIP to GP-backed Questel

The deal is subject to the approval or the German Financial Supervisory Authority and the relevant competition authorities.

Paragon acquired a majority stake in NovumIP (then known as Novagraaf) from Gilde Buy-Out Partners in February 2017, deploying equity via Paragon II. The fund held a final close in July 2014 on €412m, and generally invested in privately held Mittelstand companies and non-core subsidiaries of larger corporates, focusing on businesses with enterprise values of €30-150m. At the time, Novagraaf reported revenues of €70m and employed 400 staff.

Novagraaf merged with Germany-based Pavis in December 2019 to form NovumIP. The business acquired payment annuity payment management specialist Ipris in August 2020.

Paragon will invest in the new structure to acquire a minority stake in Questel, deploying equity via Paragon III. The fund targets businesses with enterprise values of €30-250m and EBITDA of €10-30m, generally focusing on businesses in the DACH region, but also with the option to invest in neighbouring countries.

The transaction is supported by additional capital from IK, Eurazeo and Raise. IK and Eurazeo will each invest around €150m following the deal, according to a statement. IK is deploying equity via its IK IX vehicle, which held a final close in May 2020 on €2.85bn.

Raise Investissement first invested in Questel in June 2015, backing its SBO from Syntegra alongside mezzanine provider Capzanine. The company was values at €55m at the time.

IK acquired a majority stake in Questel in April 2018, via its €1.85bn IK Fund VIII. Questel's CEO, Charles Besson, reinvested in the business alongside Raise, while Capzanine provided a unitranche facility to support the deal.

Eurazeo invested in Questel alongside Raise and IK in November 2020, with Raise and IK investing an initial amount of €200m for a majority stake. Questel was valued in the €910-915m region at the time.

During the investment period, Questel acquired Germany-based Innosabi and US-based DoeLegal. Questel CEO Charles Bresson told Unquote sister publication Mergermarket that the company was looking for targets in the IP solutions sector, advised by DC Advisory, with NovumIP mentioned on a list of potential targets.

Company
NovumIP was formed via Novagraaf and Pavis's merger in 2019, although Novagraaf itself was founded in 2000, while Pavis was founded in 1980. The company provides a range of intellectual property consulting and legal services, including patent and trademark registration and payment, as well as online brand protection and IP revenue generation. The company employs 380 people and has offices in Amsterdam and Munich.

People
NovumIP – Reinhard Ottway (chairman).
Novagraaf – Lutgarde Liezenberg (CEO).
Pavis – Thomas Gruber (CEO)
Questel – Charles Besson (CEO).
Paragon Partners – Krischan von Moeller (managing partner); Max Moser von Filseck (principal).
Eurazeo – Marc Frappier (managing partner).
IK Investment Partners – Dan Soudry (managing partner).
Raise Investissement – Mathieu Blanc (managing partner).

Advisers
Vendor – Alvarez & Marsal (financial due diligence); Baker McKenzie (legal); KPMG (tax); Rothschild (M&A).

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• Topics
• Exits
• Expansion
• Benelux
• France
• Industrials
• Partial sale
• Build-up
• Netherlands
• France
• Paragon Partners GmbH
• IK Investment Partners
• Eurazeo
• Raise Investissement