Matrix reaps 17.8x on Camwood

Kimberly Romaine
02 May 2012

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Matrix Private Equity Partners and Foresight Group have sold their original stake in Camwood, an IT services business, in a sale back to management.

The deal generated a return of 3.8x money for Matrix, which, together with proceeds from the sale of spin-off App-DNA in October 2011, bring the backer's total return to 17.8x aggregate for Matrix. Matrix was the largest single shareholder, followed by management, then Foresight, with roughly half the equity stake of Matrix.

The combined exits have delivered total proceeds of £18m for Matrix's Income & Growth VCT over the life of its investment; £500,000 invested in App-DNA sold for £16m, and £500,000 in Camwood sold for £1.9m.

Guy Blackburn, the Matrix non-executive director of Camwood and App-DNA who managed both investments to exit, told unquote" there was no intermediary in the latest Camwood sale. "We held a strategy meeting with management and reviewed several possible courses of action. Management made significant returns from the sale of App-DNA for themselves as well Matrix, and as a result were in a position to independently fund a secondary buyout of Camwood."

Previous funding
In November 2003, Camwood secured a £1.5m investment from VCF Partners. The deal consisted of £1m in assumed liabilities and £500,000 of equity. It took four months to complete the transaction. The remaining equity was held by the management and founders of the company.

Company
Camwood was established in 1997 and provides specialised application packaging services to blue chip companies. App-DNA was spun out from Camwood in 2010. Based in London, and with offices in the US, Australia and France, AppDNA employs around 80 staff and recorded a £7.6m turnover in 2010/11.

People
The Camwood MBO was led by its CEO, Frank Foxall. Matrix's Guy Blackburn served as non-executive director of Camwood and App-DNA. Russell Healey, partner, worked on the deal for Foresight Group.

Advisers
Company and management – Osborne Clarke (Legal).
Vendor – Marriott Harrison (Legal).