Synova sells majority stake in Mintec to Five Arrows

Wahida Ahmed
02 February 2022

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Synova-backed Mintec, a Buckinghamshire-based provider of commodity price data to the consumer, food and capital goods sectors, has been acquired by Five Arrows Principal Management, the France-based private equity arm of Rothschild Merchant Bank.

Synova acquired its stake in the business in a management buyout from the founding Peska family in December 2017. A contemporaneous Times report estimated the deal to be worth around GBP 30m. A source close to the situation told Unquote that Synova acquired 100% of the business at the time – 60% from Vladimir Peska, and the remainder from the rest of the Peska family. The MBO was led by the CEO, Tony Pauley, who joined the company in 2016.

The GP invested via Synova III, which closed on its hard-cap of GBP 250m in January 2016 after less than three months on the road. The fund targets UK companies with enterprise values of around GBP 10m-50m and invests tickets of GBP 10m-30m. It targets companies operating in the financial services, technology, healthcare, education and consumer sectors, according to Unquote Data. In August 2021, Mintec acquired Denmark-based Kairos Commodities, funded through cash on the company's balance sheet, as reported.

Synova will reinvest in the business for a significant minority stake from its latest fund, Synova IV. The GP's fourth fund launched in March 2019 and held a first and final close on its hard-cap of GBP 365m, according to Unquote Data. The management team has also reinvested for a minority stake in the business, said a source close.

According to a press release, the deal delivered a return of 12x invested capital and an IRR of 80%. Accounts show that Mintec had a turnover of GBP 9.1m in 2020 versus GBP 7.3m in 2019 demonstrating a 25% increase. Its adjusted EBITDA was GBP 3.2m in 2020, versus GBP 2.4m in 2019 – a 33% increase.

Synova was approached by potential investors and that led to a sale taking place prior to a process being run, according to a source close.

Mintec marks the third realisation from Synova III in the last 12 months, according to the GP. Other exits include Fairstone to TA Associates, netting a 4.5x return, as reported; and the sale of Tonic Games to Epic Games, netting a 200% IRR, as reported.

Five Arrows' latest fund, Five Arrows Principal Investments IV, was registered in July 2021. Like its predecessor, it will target Europe-based mid-market companies in the healthcare, education, data, software and technology-enabled business services sectors, according to Unquote Data.

Company
Mintec is a software-as-a-service platform headquartered in Buckinghamshire. The business employs around 50-100 people and was established in 1987. The platform aggregates pricing data and analytics for agricultural, food and manufacturing commodities.

People
Synova – Philip Shapiro (managing partner); Zachary Tsai (partner); Charles Dale (investment director); Thomas Usher (investor).

Advisers
Vendor – Houlihan Lokey (corporate finance); Osborne Clarke (legal).