Longship to buy Norwegian company Gexcon

Business daily Finansavisen cited unnamed sources as saying the purchase price could be around NOK 300m (€29.2m).

The GP will acquire Gexcon from Norce Norwegian Research Centre, a government-backed research institution, and will invite the company's employees and the management to acquire up to 10% stake in the company.

Longship is deploying equity from its latest fund, Longship II, which held a final close in November 2020 on €160m. The deal is the first investment from the vehicle, which held a final close in November 2020 on €160m. The fund acquires majority stakes in Norwegian companies with potential for growth locally and/or internationally, and with turnover in the range of NOK 150m-1bn.

The GP told Unquote that the company had been on its radar since 2016. It added that the company was severely impacted by the pandemic and will continue to be affected for at least the first half of 2021, and that the purchase price reflected this.

Longship partner Bernt Osthus said: "The company and previous owners had spent €700m in research and development over the last few decades, but not been sufficiently focused on the commercial side. From experience, situations like these where the owners are from academia open up a lot of opportunities when their services are made commercial. This is what we found attractive about the deal. There is very good growth potential in changing the culture from academic to commercial, and from applying a more conventional business model and selling the software as a service."

He added: "We are transformational investors and that's what we need to be with Gexcon as well. In terms of products, we are going to make them more commercially relevant. Further, the software will be made more user-friendly. In terms of management, the company will be restructured to ensure the team is oriented in the commercial direction, and that is a transition that will take the better part of this year. "

The GP said it had no current plans for add-on acquisitions, but might consider them in the second or third year of the company.

Company
Founded in 1998 and based in Bergen, Gexcon is a provider of process safety software, safety consulting and testing services, and specialises in analysis of dispersion, explosion and fire-related risk and consequences. 

In 2020, it generated revenues of NOK 180m (€17.5m). It employs 147 employees and has 11 subsidiaries and branch offices across the globe. 

People
Longship – Bernt Østhus (partner). 

Advisers 
Equity – McKinsey (financial due diligence); Deloitte (financial due diligence); Schjødt (legal); Simula Consulting (technology due diligence). 
Vendor – Alpha Corporate Finance (M&A); Thommessen (legal); KPMG (financial due diligence). 

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