Synova backs Defaqto SBO

Alice Murray
31 March 2015

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Synova Capital has backed the management buyout of financial services company Defaqto from previous backers FF&P Private Equity and Foresight Group for ТЃ24.25m.

The deal gave Defaqto an enterprise value of £24.25m and saw outgoing shareholders FF&P and Foresight receive gross proceeds of £27.6m.

The fresh capital will be used to support organic growth, with aims to double the size of the business over the coming years. According to Phillip Shapiro, managing partner of Synova, growth will be achieved by leveraging the company's proprietary data to create more products.

The deal came about through a limited process led by Deloitte. Synova had reached out to the management team around 18 months ago as the GP was keen to invest in big data.

Previous investment
FF&P acquired Defaqto through portfolio company Find Portal, which purchased Defaqto parent The Independent Research Group (TIRGL) in September 2006, according to unquote" data. At the time of the deal, Defaqto reported turnover of £4.1m.

Foresight became a shareholder in the company in 2011 when the group took over Electra's two distressed Acuity Growth VCT funds, one of which was a shareholder in Defaqto.

According to Foresight partner Russell Healey, the GP installed a new CEO and chairperson following its investment in the company. The investor duo also aimed to develop the company's brand recognition as well as boost its subscription products, ratings services, conference and research activities.

Company
Defaqto provides information on financial services products. It operates a retail financial product and fund database, which collects data from across the market and enables comparisons. Dafaqto creates products and services based on its data analysis, including ratings, software solutions, publications and events.

The company is best known for its rating services, often used by large banks and insurance companies to market their products to consumers.

Established in 1994, Defaqto is headquartered in Haddenham and employs around 100 people.

People
Zahid Bilgrami is CEO of Defaqto. Philip Shapiro is managing partner of Synova and joined Defaqto as non-executive director. Russell Healey is a partner at Foresight and served as Defaqto's director. Investment director Llewellyn John represented FF&P on Defaqto's board.

Advisers
Equity – Clearwater International (Debt advisory).
Vendor – Deloitte (Corporate finance).