NorthEdge reaps 4.4x from Sumo Digital sale to Perwyn

The transaction, which follows just a two-year holding period, represents an IRR of 127% for NorthEdge’s first fund.

Under the GP’s tenure, the games developer opened its second UK studio in Nottingham in January 2016. The company appointed Kelvin Tuite, formerly of Microsoft-owned Lionhead Studios, as an art director in its new studio in May.

The sale marks NorthEdge’s second divestment of the year, following the £93m AIM listing of tissue manufacturer Accrol Group in January.

Yorkshire Bank has provided a senior debt package to support Perwyn’s acquisition of Sumo.

Previous funding
NorthEdge backed the management buyout of Sumo from US-based Foundation 9 Entertainment in October 2014, with Barclays providing a debt facility to support the deal.

Capital for the original transaction was drawn from NorthEdge’s maiden fund, a 2009-vintage vehicle that held its final close in April 2013 on its £225m hard-cap.

Company
Founded in 2003, Sumo is headquartered in Sheffield with additional offices in Nottingham and Pune, India. The business develops titles including the Little Big Planet, Forza Horizon and Sonic & All-Stars Racing franchises for consoles, desktops and mobile devices.

The company employs 350 staff, up from 240 at the time of NorthEdge’s investment. It has also increased its revenues under the GP’s tenure from £13.2m to £23m.

People
NorthEdge – Andy Ball (partner); Phil Frame (investment director).
Perwyn – Andrew Wynn (partner).
Sumo Digital – Carl Cavers (CEO).

Advisers
Vendor – KPMG, Christian Mayo, Graham Pearce, Stephen Leah, Mick Morris (corporate finance); Addleshaw Goddard, Yunus Seedat, Neville Moore, Luke Aylett (legal); Sheridans, Sara Wax, Alex Chapman (legal).
Acquirer – PwC, Will Oxley, Nick George, Andrew Baldwin (financial due diligence, commercial due diligence, tax); Ashfords (legal).

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