Verdane scores 5x MOIC in partial exit of Inriver to THL

Verdane received 5x money on invested capital (MOIC) as a result of the deal, according to a source familiar with the situation.

Verdane first invested in Inriver in 2015, according to Unquote Data. The GP deployed equity via Verdane Capital VIII, which held a final close in March 2014 on SEK 2bn (EUR 214m).

The company’s annual recurring revenues grew by 9x during the investment period, the same source said. Inriver has also seen 11x sales growth since 2015, they added.

A second source familiar with the situation told Unquote that the deal is a combination of primary and secondary investment, with the largest part being the latter. Verdane, Inriver's largest investor, will reinvest proceeds in the company, where THL will have the majority stake in the new setup, they added.

The enterprise value of the joint primary and secondary investment is around USD 400m, the same source said.

Since the initial investment, Verdane has assisted the company in various value creation initiatives such as successfully completing SaaS migration, hiring a new management team including CEO and CFO, and executing on strategic M&A to broaden the product offering, according to the same source.

The transaction, expected to close in 2Q22, will include a significant primary capital investment to support Inriver's product development roadmap and expand its presence in North America and Europe, according to a press release.

THL invested in Inriver through both its flagship Fund IX and its Automation Fund, the private equity industry's first fund dedicated to automation-related businesses. THL held a final close for Fund IX in October 2021 on USD 5.6bn, according to Unquote Data. THL held the final close of its ninth flagship fund at its hard cap with USD 5.6bn in capital commitments in October 2021. The GP's Automation Fund is dedicated to the automation sector and held its final close on USD 900m in November 2020, according to a press release.

Both Verdane and Inriver declined to comment. THL had not responded to requests for comment at the time of publication.

Previous funding
In August 2013, Industrifonden and Zobito led a SEK 20m (EUR 2.3m) investment in Inriver.

Verdane invested USD 10m in Inriver in 2015. Existing investors Industrifonden and Zobito also participated in the round, according to Unquote Data.

In 2017, Inriver raised EUR 10.5m from existing investors Verdane, Industrifonden and Zobito, and partially through a loan from the European Investment Bank's fund European Fund for Strategic Investments.

In 2020, US-based investment firm Lugard Road Capital led a USD 32m funding round for Inriver, alongside existing investors Verdane, Industrifonden, Zobito and RoosGruppen.

Company
Headquartered in Malmö, Sweden, with its North American headquarters in Chicago, Inriver develops software to help B2B and B2C businesses consolidate product information. It serves 1,600 brands and 700 customers globally, according to the press release The company was founded in 2007.

People
Inriver - Thomas Zanzinger (CEO).
Thomas H. Lee Partners - Jeff Swenson (managing director and head of vertical software); Cliff Longley (director).
Verdane - Pål Malmros (partner).

Advisers
Inriver - Evercore (corporate finance); Sidley Austin (legal).
Acquirer - SVB Securities (corporate finance); Kirkland & Ellis (legal).

 

[Editor's note: This article and its headline were updated post-publication to add additional comments from a source, to add a decline to comment from Inriver, and to reflect the fact that this deal is not a full exit for Verdane.]

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• Topics
• Nordics
• Technology
• Exits
• Buyouts
• Sweden
• TH Lee/Groupe Arnault
• Verdane Capital Partners