Horizon acquires Ascent and TechHuddle for £30m

Katharine Hidalgo
10 December 2019

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Horizon Capital has acquired a majority stake in Ascent Software and purchased TechHuddle for ТЃ30m.

Horizon established a newco, which acquired both businesses, and has a majority stake in it. Unquote understands all TechHuddle shareholders exited completely, while three of the Ascent shareholders reinvested in the business and one exited.

The firm is currently investing from its £200m Horizon Capital I fund, which closed in October 2018. This is the third investment from the fund, which invests equity tickets of £10-50m in UK-headquartered technology companies.

Unquote understands Horizon paid an entry multiple of 4-8x for the companies.

This is the third IT services buy-and-build platform investment Horizon has completed in 2019. It follows the buyout of data analytics provider Strat 7 in March and the investment in education software developer Juniper Education in June.

The firm expects to merge the two IT services to create a combined business with 300 developers in delivery centres in Malta and Bulgaria. The business will have revenues of £25-50m.

Stewart Smythe joins the business as CEO and will work alongside Ascent founder and chief operating officer Joseph Sultana. The management team includes Ben Hudson as CFO, who was previously the finance director at ByBox.

HSBC has led a syndicate, which includes Natwest.

Company
Headquartered in Reading, Ascent is a developer of bespoke software for SME customers in the UK and Germany. Founded in 2003, the company has an EBITDA in excess of £5m. The company has delivery centres in Luqa and Plovdiv.

TechHuddle provides software development services with a focus on IP development in the UK. Founded in 2012 and based in London, the company operates delivery centres in Plovdiv and Sofia.

People
Horizon Capital – Simon Hitchcock (managing partner).
Ascent/ TechHuddle – Stewart Smythe (CEO); Joseph Sultana (chief operating officer); Ben Hudson (CFO).

Advisers
Equity - Harrison Clarke Rickerby, Richard Wilkey (legal); Deloitte, Stuart Cottee (tax); Latitude, Steve Hacking (commercial due diligence); PwC, Graham Watson (financial due dligence); GCA Altium, Simon Chambers (debt advisory).