Foresight Capital exits Codeplay Software in trade sale

Codeplay confirmed in a statement that the buyer is the US semiconductor group Intel.

The transaction will generate approximate gross proceeds of GBP 48m (USD 60m), implying a 15.7x multiple on capital invested and an IRR of nearly 100% per annum, according to a statement.

Foresight invested in Codeplay in 2018 via its multiple funds. This includes Foresight VCT, EIS and Foresight Nottingham Fund, director Chris Wardle told Unquote.

Foresight, which held a 35% stake in Codeplay, was valued at GBP 1.7bn as of December last year, according to its annual report.

Since its investment, Foresight has more than doubled the size of the company purely through organic growth. This includes the appointment of senior team members, including chairman Jim Nicholas, who was the previous CEO of chip design company MIPS. The GP’s investments also led to further funding for its software development projects, which improved the performance of chips used in high-performance and low-power environments.

Acuity Advisors was appointed earlier this year as the business matured with a strong list of clientele and team members, Wardle said. The process mainly attracted strategic interest, he added.

Foresight originated the deal through the Foresight Williams Technology EIS and VCT funds, a joint-venture investment vehicle with UK’s Williams Advanced Engineering. Codeplay was actively seeking investments to fund its foray into automotive capabilities, Wardle said.

Foresight currently has a “healthy pipeline of new investments and also a number of exits” for the remainder of this year, according to Wardle.

It continues to see activity across sectors, including the emerging trend of telehealth, an area in which the GP has done several transactions in the past six months, including Hexarad and HomeLink healthcare, both of which help with reducing the current NHS backlog, Wardle said.

Foresight funds focuses exclusively on UK SMEs investments where it can provide growth capital or support management buyouts.

Last year, Foresight invested in 58 SMEs and exited eight businesses.

Company
Founded in 2002 and headquartered in Edinburgh, Codeplay develops software for computing process optimisation related to AI integration. The company aims to enable software interoperability between different chip designs and applications. Its applications range from healthcare imaging to self-driving automotive vehicles, among others, Foresight's Wardle said.

People
Foresight Group - Chris Wardle (director).
Codeplay - Andrew Richards (CEO).

Advisers
Vendor - Acuity Advisors (M&A); Goodwin Procter (legal); MBM Commercial (legal).

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• Exits
• UK / Ireland
• Technology
• Foresight Group
• United Kingdom
• Trade sale