Kester to reap 4.8x return in Vixio exit to Perwyn

Ero Partsakoulaki
13 December 2022

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Kester Capital has agreed to sell Vixio Regulatory Intelligence, a UK-based provider of global regulatory intelligence to the payments and gambling markets, to European private equity investor Perwyn.

The UK lower mid-market private equity firm will see a 4.8x return on its investment and an IRR of over 60%, according to a press release from the vendor.

Kester invested in the business, formerly ComplianceOnline, via its Kester Capital II fund in August 2019, according to Unquote Data. The company's EV at the time was between GBP 10m-GBP 25m, as reported. The deal was the first investment of the GP's second vehicle, which held a final close at its hard cap of GBP 90m a year later.

The sale represents Kester's sixth consecutive exit over 3x and comes on the back of the sale of Avania earlier this year, which delivered a return of over 8x. It also marks Kester's first exit from Kester Capital II, which invests cheques of GBP 5m-GBP 25m to lower mid-market companies with enterprise values of GBP 10m-GBP 50m.

Under Kester's ownership, the business enhanced its product offering and domain expertise, developed the technology platform to enable future growth and invested significantly in the recruitment of a new management team, according to the press release. Vixio has doubled its subscription revenues over the last three years, while growing profit and cash flow at a substantially faster rate.

Perwyn's investment, alongside a reinvestment by management, seeks to increase Vixio's geographic penetration, widen the product set and move into adjacent markets, while actively pursuing M&A opportunities, according to a press release from the buyer.

As part of the transaction Gehan Talwatte joins Vixio's board of directors as independent chair. Talwatte has experience as an executive and director overseen the growth of several intelligence services businesses across various industries. Most recently, he was the deputy chairman of Palatine-backed Anthesis Group, a UK-headquartered sustainability firm engaged in providing technology, consultancy and managed services to clients.

Perwyn's investment manager Mark Deed will also join Vixio's board of directors.

The European private equity investor is specialised in buyout and growth capital investments in technology, services, healthcare and food & ingredients. It typically invests between GBO 20m and GBP 200m per deal.

It hired Silverfleet's James Gavey as CFO over the summer and upped its commitment to France by hiring Ardian's former head of France Mathieu Antonini as country head in September, Unquote reported.

Moreover, it acquired in June Denmark-based European Sperm Bank from Nordic private equity firm Axcel.

Company
London-headquartered VIXIO is a provider of regulatory and business intelligence to the global payments and gambling industries. Through its PaymentsCompliance and GamblingCompliance subscription products, it allows regulatory and legal teams to manage risk and discover market opportunities by providing information, data and analysis. With a second office in Washington DC, VIXIO serves over 400 customers globally, including operators, regulators, technology providers and law firms.

People
Perwyn − Gurinder Sunner (partner), Mark Deed (investment manager and Vixio's newly appointed board member), Angus Duthie-Jackson (associate).
Vixio − Mike Woolfrey (CEO).

Advisers
Equity − Cardean Bell (M&A), Gowling WLG (legal), Deloitte (FDD and tax), PwC (commercial due diligence), Xaenus Blue (technology due diligence), Partners& (insurance DD), Locktons (W&I).
Vendor & Company − Osborne Clarke (legal and tax).