BCP heads for Fund II close, plans two more deals in 2020

Beyond Capital Partners is currently on the road for its second fund, which is targeting €125m, compared with its debut €25m vehicle.

"We had initially intended to hold a late April or early May close for the fund," Kauter told Unquote. "For the purpose of the Ounda deal we used equity from the fund, but we are waiting for one more commitment from one LP, then first close. It would be fair to expect a final close in H2 2020, with a handful of additional LPs. Coronavirus had some impact on the timing, but there will be no impact on the overall success."

The fund intends to make six to eight platform investments, acquiring majority stakes in DACH-based SMEs in the areas of business services, IT, software, healthcare, lifestyle and entertainment.

The portfolio of the GP's first fund comprises three companies, including IT equipment and security business Sysob, which BCP acquired in September 2016. "In our first fund's portfolio, we saw 35% revenues and earnings growth for Sysob in the last year, so they are seeing momentum," says Kauter.

Although festival organiser BigCityBeats has been impacted by the coronavirus lockdowns in place across Europe, the business has been protected from the worst of the potential damage, Kauter argues. The GP acquired the company in October 2018.

"Quite some time ago we arranged for insurance coverage to protect BigCityBeats from cancellations. Revenues will be small, but earnings will be pretty much the same as forecasted," says Kauter. He adds that the company has seen opportunity in the crisis. "The company is an ongoing leader in the field as a festival innovator, doing for instance the first worldwide drive-in music festival recently, and we were the first to hold weekly Saturday afternoon DJ live streams. We are using this time to position BigCityBeats even more as a global brand when festivals are allowed again."

Lighting service provider LDBS Lichtdienst has been part of BCP's portfolio since September 2015. The business has seen some impact from the crisis, but its outlook remains positive, Kauter says. "LDBS is somewhat dependent on the activity of its largest B2B customers, some of which have bigger concerns than relamping their business, but the order book is full. There was some dip on the revenues side, which went through to EBITDA, but we are focused on working through this with the management team."

"For Fund II, Ounda is the first deal and we are currently looking at two opportunities in the IT and business service side, so we might have two additional deals to come before the end of the year," says Kauter.

The GP is being cautious in its approach when evaluating potential targets, Kauter says. "There has been a slowdown in deal activity and we as an investor are more sensitive in evaluating deals. I would like to be sure that the figures for March to May are not too specific to this time period. It's important to keep your foot in the market to do good deals with lower multiples, but not just for the sake of getting deals done."

BCP will also make a series of add-ons for newly acquired optician chain Ounda. It plans to make 35-40 acquisitions before the end of the year and will make 80 add-ons in total, acquiring family-owned businesses with revenues of €500,000-1.5m.

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