FPE sells Questionmark to trade, nets 3.5x money

Questionmark will operate as a division within Learnosity, retaining its brand, products and existing offices.

The deal has generated returns of 3.5x money invested for FPE, the GP said in a statement.

Unquote sister publication Mergermarket reported in February 2021 that FPE had placed Questionmark for sale. Sources told Mergermarket that mid-market PE firms including Bowmark Capital could show interest in the asset.

FPE invested in Questionmark in September 2016, deploying equity via FPE Fund II. The fund held a final close in October 2017 on £100m and targets UK-based companies with enterprise values of £20-50m and turnover of £5-25m.

The sale of Questionmark is the third exit from the fund, according to a statement.

During FPE's investment period, Questionmark appointed Lars Pedersen as CEO, and invested in its product and sales capability. The company also completed a migration of its technology to a single software-as-a-service platform. The company achieved annual revenue growth of 35% by the end of 2020, according to the same statement.

Battery Ventures acquired a majority stake in Learnosity in 2018, and went onto acquire the 40% stake in the company previously owned by 3P Learning in 2018 for around £13.9m.

Company
Founded in 1988, Questionmark is an assessment software platform for businesses, serving sectors including financial services, technology, pharmaceuticals, utilities, retail, awarding bodies, higher education and the public sector. The company's largest end markets are the US, Germany and the UK.

At the time of FPE's investment, the company posted EBITDA of £290,000 and revenues of £8.65m. In the 2020 financial year to 31 March 2020, the company posted revenues of £14.9m, compared with £12m in 2019 and £11.1m in 2018. The company's EBITDA stood at £3.8m in its latest accounts, compared with £367,000 in 2019.

The company employed 81 staff in 2020. Questionmark is headquartered in London and has additional offices in Europe and the US.

People
Learnosity – Gavin Cooney (CEO).
Questionmark – John Kleeman (founder); Lars Pedersen (CEO).
FPE Capital – David Barbour (managing partner).

Advisers
Vendor – Houlihan Lokey (corporate finance); Goodwin (legal); EY (financial & commercial due diligence); Intecha (IT due diligence).

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