Cinven to sell CPA Global to Leonard Green & Partners

Kenny Wastell
29 August 2017

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Cinven has agreed to sell CPA Global, a provider of intellectual-property-related services and technology, to US-based buyout firm Leonard Green & Partners.

The terms of the deal remain undisclosed, though a source close to the transaction told unquote" a previously reported deal valuation of £2.4bn is broadly correct. The transaction was based on an EBITDA figure of £155m, representing an entry multiple of 15.5x for Leonard Green.

Another source with knowledge of the situation told unquote" the sale generated an IRR of 24% for Cinven, with the GP and other co-investors making more than €1bn of capital gains on the deal.

Under the vendor's tenure, the company has undertaken an international acquisitive growth strategy, bolting on three businesses in the US, two in Europe and one in Asia. Most recently it acquired Korea-based Markpro in July 2017 and US-based Innography in November 2015.

The company has also invested in the development of its technology products and expanded its presence in Asia, the US and Europe by opening new regional offices and expanding existing locations.

According to a statement issued by the vendor, CPA has achieved double-digit EBITDA growth in its IP software and renewals business since the initial investment.

Cinven was invested in the company via its fourth fund, which held a final close in July 2006 on €6.5bn.

The Sunday Times recently reported the vendor was exploring a potential IPO alongside the auction process. Meanwhile, citing sources with knowledge of the situation, unquote" sister publication Mergermarket recently reported that Canada Pension Plan Investment Board, PSP Investments, CDPQ, Onex, Astorg, Baring Private Equity Asia, GTCR and Permira also expressed an early interest in the company.

The transaction is Cinven's fifth divestment in 12 months, following the sales of UK-based web hosting provider HEG to US trade buyer GoDaddy; Germany-based residential and technical lighting provider SLV Group to Ardian; Italian aerospace propulsion operator Avio Space Propulsion to Space2 and Leonardo-Finmeccanica; and the partial divestment of its stake in Norwegian enterprise software business Visma to a consortium of investors led by HgCapital.

The CPA deal is subject to regulatory approval.

At the time of publication, Cinven was yet to respond to requests for comment.

Previous funding
Cinven acquired CPA from ICG and Epiris (then Electra Partners) in January 2012 in a secondary buyout reportedly worth around $1bn.

Company
Founded in 1969 and headquartered in St Helier, Jersey, CPA provides software, services and data analytics to the intellectual property sector. The company has 23 offices and manages around 2 million patents for around 10,000 clients.

People
Cinven – Stuart McAlpine (managing partner); Anthony Cardona (principal).
CPA Global – Simon Webster (CEO).

Advisers
Vendor – Goldman Sachs (M&A); JP Morgan (M&A); Freshfields Bruckhaus Deringer (legal); Boston Consulting Group (commercial due diligence); EY (financial due diligence); BDO (tax).