Hg to sell Itm8 to Axcel, Chr. Augustinus Fabrikker

Wahida Ahmed
18 May 2022

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Tech investor Hg has agreed on a sale of Itm8, a Danish supplier of managed IT services, to Nordic sponsors Axcel and Chr. Augustinus Fabrikker.

Itm8 will be combined with AddPro, an Axcel-backed Swedish IT company, to create a northern European group within end-to-end IT services with approximately DKK 2.6bn (EUR 350) in revenues, according to Axcel's press release.

Axcel will own a 45% stake in the combined business, Chr. Augustinus Fabrikker 17%, while the rest will be held by the management teams and key employees of the two companies as well as other Axcel co-investors, according to the press release.

Axcel bought AddPro in July 2020 from Adelis, and the company has made a string of add-ons including Denmark-based peer Profactor.

Mergermarket reported in February 2022 that Hg hired Raymond James to sell itm8, adding that the business had EBITDA of EUR 30m-40m. Under the new owners, the two companies will expand their product range. Itm8 will now serve Sweden, while AddPro will gain access to more services.

During Hg's tenure, Itm8 made 13 acquisitions to broaden its end-to-end offering and serve a larger customer base more effectively. Since the sponsor's investment in 2018, the company doubled its revenues, staff and customer base, according to Hg's press release.

Axcel is investing through funds including Axcel VI, which held a final close in August 2021 on its hard-cap of EUR 800m. The vehicle backs mid-market Nordic companies, predominantly in Sweden and Denmark, with enterprise values of EUR 100m-250m, according to Unquote Data.

Hg is investing through funds including Hg Mercury 3, which held a final close in October 2020 on EUR 1.3bn. The vehicle backs small-cap companies with enterprise values of EUR 50m-250m, according to Unquote Data.

Company
Itm8 is based in Denmark and is present in 19 countries including, Sweden, the Philippines, and the Czech Republic. Itm8 employs around 1,100 staff and serves 4,200 customers. The company's services include cloud services, digital transformation, application services, and cyber security.

People
Itm8 - Henrik Kastbjerg (CEO).
AddPro - Nicklas Persson (CEO).
Hg Capital - Nick Jordan (partner).
Axcel – Christian Bamberger Bro (partner).
Chr. Augustinus Fabrikker - Claus Gregersen (CEO).