Inflexion taps Harris Williams for upcoming Alcumus exit

Harris Williams is assisting the UK private equity group on the sale, two of the sources said.

While the timing of the process is scheduled for H1 next year, private equity suitors could preempt the auction given the popularity of the space, one of the sources said. Several private equity firms are showing interest in the business, one of the sources and an adviser working in the sector said. BC Partners and Providence are logical suitors, the adviser added.

Cardiff-headquartered Alcumus, which, alongside ISO certification services, offers software to help firms capture risk data and ensure health and safety compliance, generates GBP 30m-35m in EBITDA, the adviser said.

Inflexion, which bought Alcumus in October 2015 for GBP 92m, is likely to seek a valuation of 15-20x EBITDA for the business, but will need to demonstrate growth before achieving this range, a second sector adviser added.

Alcumus reported GBP 19.4m in EBITDA in the year to December 2019, up from GBP 17m recorded in the same period a year earlier, according to Companies House filings. Turnover was GBP 46.2m in 2019, compared with GBP 40.1m a year earlier, driven by recurring revenues, customer retention and demand for its technology-enabled services.

Alcumus's growth has also been bolstered by M&A in recent years, having bought UK-based permit-to-work software company Banyard Solutions and Canadian compliance provider ContractorCheck in June 2020, both for undisclosed sums.

Comparable transactions include the sale of close competitor Constructionline, one of the advisers said. The industry database business was sold by Capita to Warburg Pincus as part of the sale of its Supplier Assessment Services (SAS) division in June 2018. The division, which was sold for GBP 160m, was valued at 20x EBITDA, according to Mergermarket data.

Alumcus's compliance software services also share similarities with UK-based Citation, which was sold to KKR last year by Hg for an undisclosed fee, the adviser said. Citation's sale process had attracted Permira and Providence at the time, as reported.

Alcumus could also be compared to information services peers, including Wolters Kluwer, UK-based RELX and Australia's Nuix, given its focus on compliance and reporting, the sector adviser said.

Alcumus supported more than 40,000 clients both in the UK and internationally as of 2019, according to its annual report. The group operates health and safety accreditation and risk management solutions, as well as a division focused on ISO certification, according to the company's annual report. In addition, its software division delivers SaaS-based compliance and information exchange services.

Inflexion declined to comment. Alcumus and Harris Williams did not respond to requests for comment.

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• Topics
• Exits
• UK / Ireland
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• Inflexion Private Equity