FPE Capital acquires, merges NoBlue and Elevate2

The combined business will trade under the name NoBlue2, according to a press release. Ian Irwin, the founder of NoBlue, will become the CEO of the group, while Alex Lester, the founder of Elevate2, will be appointed the chief operating officer (COO), it said.

Both companies were identified by FPE’s in-house origination team and the transaction was agreed during bilateral negotiations with no outside advisers involved, said a spokesperson from the firm.

The transaction marks the fifth investment from FPE Fund III, which held a final close on GBP 185m in May 2022. The vehicle is expected to make 11-13 platform deals, deploying GBP 5m-GBP 25m per company, targeting businesses with enterprise values of GBP 10m- GBP 50m, according to Unquote Data.

The GP’s first investment from the fund in April 2022 was also in the enterprise resource planning (ERP) software sector with the acquisition of Egress, a cloud and data migration specialist. It also invested into Codestone in 2021, a SAP ERP software partner, which has competed two bolt-on acquisitions since then. The firm had previously invested in 2018 in the UK reseller of Microsoft Dynamics NAV ERP software and services provider TNP (The NAV|365 People) and achieved 5.6X MoC on its sale to trade in July 2021.

With strong synergies between NoBlue and Elevate2, the GP now seeks to create a leading NetSuite Solutions provider in the UK region, seeking to invest further in the newly formed entity’s application development and related services, as well as to scale the business further internationally.

The UK will be the principal market targeted for bolt-on acquisitions, said the spokesperson, noting that this could also extend into continental Europe. “Having created an aggregator of scale with this initial combination, bolt-on targets will be considered at all sizes if there is good product, customer and geographical fit,” the spokesperson said. It is highly likely that future targets will have at least a significant portion of their revenues from the NetSuite product channel, the spokesperson added.

The firm considers the opportunity for ERP and related applications to be significant and growing, while aiming to further grow the combined businesses both organically and via acquisitions, it said.

The market remains highly fragmented in the UK and Europe and has strong organic growth potential, said the spokesperson, pointing to a recent study by Altman Solon which concluded that ERP penetration in the two regions, respectively.

As part of this investment, investor Glenn Timms has been appointed as the non-executive chair of the group. Timms has extensive experience advising private equity-backed technology and service businesses in the UK and the US markets, including NVM-backed Inprova, a UK-based technology and data-enabled procurement services business provider and NorthEdge-backed Meet, a talent provider to the life sciences sector.

Company
NoBlue2 brings together two UK Oracle Netsuite Solution Partners, NoBlue and Elevate2. NoBlue has focused on Oracle NetSuite since 2011, while Elevate2 was founded in 2015 as an independent NetSuite Solution Provider. Headquartered in the UK, the combined business has people and operations in multiple global locations, including Europe and the Philippines and is approaching 100 full-time employees. It serves customers across a range of industries and countries, such as fintech, blockchain, discrete manufacturing and retail, and through the lifecycle of an ERP adoption, including strategic consultancy, implementation, optimisation and support.

People
FPE Capital − Dan Walker (partner), Harriet Hunt, Harry Gill (investment managers).
NoBlue − Ian Irwin (founder).
Elevate2 − Alex Lester (founder).
NoBlue2 − Ian Irwin (CEO), Alex Lester (COO), Glenn Timms (chair).

Advisers
Equity − Stephenson Harwood (legal); Graph Strategy (commercial due diligence); Crowe U.K. LLP (financial and tax due diligence), Tax Advisory Partnership (tax structuring); The Continuum (management).
NoBlue − Myerson (legal)
Elevate2 − Herrington Carmichael (legal).

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• Topics
• UK / Ireland
• Technology
• Buyouts
• United Kingdom