Cathay sells stake in Datawords to Keensight

François Rosenfeld, investment manager at Cathay Capital, told Unquote that the exit process happened quickly from the end of 2019 to the start of 2020. Rosenfeld explained that the timing of the exit was motivated by the GP's investment cycle and the fact that the company had fulfilled the goals for growth set at the start of the investment period.

Cathay originally invested in the company via its first Sino French Midcap Fund, which held a final close in December 2014 on €500m. Rosenfeld told Unquote that Datawords was one of the vehicle's first investments.

The GP is currently deploying from and on the road for Cathay MidCap II, which held a first close on €600m in July 2018 and is expected to hold a final close in 2020.

During Cathay's investment period, the company said in a statement that its revenues grew from €30m to €70m and it increased its headcount from 400 people to 800. The company also expanded its presence in the US and Canada, opening offices in Montreal and Mexico City, and into Asia, opening offices in a number of locations including Shanghai and Manilla.

Datawords has made a number of add-on acquisitions since 2015, including Vanksen, 87 Seconds and WhatSquare.

Rosenfeld told Unquote that the GP is pleased with the returns on the deal, but declined to disclose further details.

Previous funding
In July 2009, Cathay bought a minority stake in Datawords via a growth capital financing of €3m.

Cathay divested its stake in 2011 as part of an MBO backed by Capza and a debt package from LCL and Societe Generale.

Cathay, Keensight and BPI France then invested in Datawords in July 2015. Cathay was previously the company's largest shareholder. The deal was supported with a senior debt facility underwritten by LCL and Societe Generale. An additional mezzanine loan was provided by Capza.

Rosenfeld told Unquote that Cathay was keen to invest again following its previous two-year investment period, having followed the development and growth of the business, and developed a strong relationship with its founders. The time was also right to ivnest in 2015, as the GP then had greater equity reserves behind it in the form of MidCap I, he added.

Company
Founded in 2000, Datawords provides multilingual marketing services that aim to assist companies with international expansion. The company reported turnover of €70m in 2019 and reports EBITDA of €15m, according to Unquote sister publication Mergermarket. It has a headcount of 800 and is based in Levallois-Perret.

People
Cathay Capital – Edouard Moinet (co-founder, managing partner).
Keensight Capital – Philippe Crochet (managing partner).
Datawords – Stanislas de Nervo (co-founder, CEO).

Advisers
Vendor – Natixis Partners (M&A); Hogan Lovells (legal).
Equity – Eurvad Finance (corporate finance); KPMG (corporate finance); Goodwin (legal);  Eleven (technology due diligence).
Company – AyacheSalama (corporate finance); Gomel Avocats (legal).

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