ECM buys majority stake in YellowFox

ECM invested via German Equity Partners V, which held a final close in June 2018 on €325m, surpassing its target of €300m. The fund deploys equity tickets of €10-40m, targeting DACH SMEs with enterprise values of €20-80m.

ECM intends to support YellowFox's growth through its experience in the software sector and its industry network, the GP said in a statement. Its previous investments in the sector include medical software platform MediFox, which the GP sold to Hg in May 2018, as well as test software developer PikeTec.

A spokesperson for ECM told Unquote that the firm also plans to support add-ons for the company, with the aim of broadening the scope of its telematics products, as well as in complementary software. The priority will initially be expansion in the DACH region, with the potential to expand beyond this. Target sizes are flexible, the spokesperson said, and will range from small players to larger direct competitors.

Sponsor-backed transactions in the telematics sector include Bridgestone Europe's acquisition of TomTom Telematics in 2019, in a deal valued at €910m. Based on similar transactions in the telematics market, a source close to the situation told Unquote that YellowFox is valued at approximately €60m.

Company
Founded in 2003 and based in Kesselsdorf, YellowFox develops telematics software for businesses operating in the transport, logistics and courier industries, as well as for private individuals. The software aims to assist businesses with increasing their productivity, cost efficiency, regulatory compliance and digitalisation. Around 60,000 vehicles use the company's telematics software, according to a statement. YellowFox employs 70 people.

People
ECM Equity Capital Management – Florian Thelenberg (partner).
YellowFox – Hendrik Scherf (co-founder, CEO).

Advisers
Equity – Taylor Wessing (legal); Flick Gocke Schaumburg (legal); Codex (commercial due diligence); Ebner Stolz (financial due diligence, tax); Code & Co (IT due diligence); Willis Towers Watson (insurance due diligence).
Vendor – Carl Finance (M&A); Deloitte (legal).

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