Nordic Capital readies Signicat for dual-track exit process

Auri Aittokallio , Charlie Taylor-Kroll and Gustav Hoejmark-Jensen
29 April 2022

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Nordic Capital has appointed Morgan Stanley and begun preparations to exit Signicat, a Norwegian digital identity and signature solutions provider, two sources familiar with the situation said.

The sposnor is considering different options for Signicat, including a sale or an IPO, one of the sources, a third source familiar and a private equity executive following the situation said.

ABG Sundal Collier is also close to the file, two more sources familiar said.

Bank pitches for roles on the planned exit took place in the first half of February, one of the sources said.

However, given the turbulent environment particularly in the ECM markets, the process is not likely to launch imminently, a sixth source familiar cautioned. Volatility in the market makes it difficult to set valuations and in many dual-track cases the IPO option is currently not viable, a banker tracking the situation said.

Signicat generated EUR 67m FY21 revenue, a fifth source familiar said. The company reported EUR 45m FY20 revenue, according to Nordic Capital's website. The company is targeting NOK 1bn (EUR 101.8m) revenue for FY22, CEO Asger Hattel said in an interview with Mergermarket in 2020.

Listing the company would make sense as there is no clear leader in the space in Europe, one of the sources said.

In case of a sale, Signicat is a clear target in the identity verification sector consolidation play and more likely to end up being absorbed by a strategic rather than taken over by another PE, one of the sources said. Mastercard and Entrust, the US-based payment services and technology companies would be logical takers for the asset, this source added.

Yet, another of the sources argued that the sector is hot and attracting high interest from PEs. Signicat's German peer, IDNow, is expected to come to market in a sale process guided by Goldman Sachs this quarter, as reported. Appetite for identity verification businesses has picked up in recent years as corporations move traditional methods of authentication online, with certain European countries such as France still in the early stages of implementation, the report noted.

Signicat was founded in 2017 and Nordic Capital became the company's majority owner in 2019. Financial details of the transaction were not disclosed. The company has made several acquisitions since, including Sphonic, the UK-headquartered anti-fraud company, this week.

Signicat, Nordic Capital and Morgan Stanley declined to comment. ABG Sundal Collier, Mastercard and Entrust did not respond to requests for comment.