Corsair-backed IDNow halts sale plans amid valuation gap

Patrick Costello and Charlie Taylor-Kroll
30 September 2022

Tweet
Facebook
LinkedIn
Google plus
Send to

IDnow has halted plans for a sale after prospective bidders balked at valuation expectations for the German identity verification provider, four sources familiar with the situation said.

The company held informal conversations with prospective buyers in the summer but decided to pull its sale plans after bidders were put off by price expectations, three sources said.

The market environment and macroeconomic headwinds also contributed to halting sale talks, two other sources said. The company is in no rush to sell given its strong growth, one of the sources said, while its debt refinancing earlier in the summer has offered the company financial support, another source added.

IDnow announced last month that it has arranged a new debt facility from BlackRock that provides up to EUR 60m in financing.

IDnow, which appointed Goldman Sachs earlier this year to handle its sale, was marketed off EUR 70m in revenues and valuated at up to 10x revenues in a sale, as previously reported. It has reached break-even point with gross margins in the region of 65%, while revenues are growing 40% year-on-year, as reported.

Ardian, TA Associates, Vitruvian Partners, Carlyle Group and Nordic Capital were named among logical suitors for the business, which was also expected to attract interest from US sponsors, as reported. German security technology group Giesecke+Devrient, which acquired a minority stake in the company in 2018, was tipped as a potential strategic bidder.

Corsair Capital acquired a minority stake in IDNow, which provides software that certifies identification processes for corporate and financial entities, for USD 40m in 2019.

Founded in 2014, IDnow has more than 350 customers including the Bank of Scotland, BNP Paribas, Commerzbank, Telefonica Deutschland, UBS and Western Union.

The halted sale process comes after Nordic Capital's sale of Signicat, a Norwegian online verification company, was pulled last month after offers for the company came in below valuation expectations.

IDnow declined to comment.