Synova generates 4x return on Meritsoft sale to Cognizant

Kenny Wastell
06 March 2019

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Synova Capital has generated a 4x return on the sale of Ireland-headquartered financial software developer Meritsoft to US-listed trade buyer Cognizant.

The exit comes three and a half years after Synova first invested in the business and represents an initial IRR of 47%, with additional proceeds anticipated via an earn-out agreement.

Since the GP's initial investment, Meritsoft has tripled its workforce, with a particular emphasis on its sales, marketing and development teams. According to a statement issued by Synova, the business has also increased its revenues and profits by around 300%.

Meritsoft also pursued international expansion during the holding period, opening a US office to support sales to Wall Street banks.

The transaction is the third exit for Synova's second fund, with the firm making a 6x return on its sale of 4Ways Healthcare in September 2018 and a 5.6x return on the sale of Stackhouse Poland in January 2019.

Synova's 2007-vintage debut vehicle was fully realised via the £20m sale of haulage and logistics software company Mandata to LDC. The vehicle generated an overall return of 4x, according to a statement.

Previous funding
Synova invested in Meritsoft (then known as Merit Software) via a growth capital deal in 2015. 22C Capital managing member Randall Winn and Meritsoft non-executive chairperson Peter Little also invested in the deal.

Company
Founded in 2000, Dublin-headquartered Meritsoft develops software for the automated management of taxes, fees, commissions and cash-flow functions between financial institutions. Its software is primarily used by investment banks and other capital market participants. The company has additional offices in London and New York.

People
Synova Capital – Philip Shapiro (managing partner); Scott Fairlie (investment director).
Meritsoft – Kerril Burke (CEO, co-founder); Paul Burke (chief technology officer, co-founder).

Advisers
Vendor – Arma Partners (corporate finance); Osborne Clark (legal).