Carlyle to de-list Innovation Group for £499m

The £499m purchase price represents a 13.5% premium on Innovation Group's closing price on 27 August 2015 and a 22.9x multiple on the earnings claimed by the company between March 2014 and March 2015.

Carlyle drew equity from its fourth buyout vehicle, which hit its €3.75bn hard-cap when it held a final close in July. Prior to Innovation Group, Carlyle Europe Partners IV has been used by the GP to acquire majority stakes in Italian elevator manufacturer Sematic in January and Spanish food business Palacios Alimentación in February, among others.

According to Carlyle, its interest in Innovation Group stems from the company's strong potential for growth within its segment. The GP also highlighted the group's increasing international activity, with plans to back its expansion worldwide via acquisitions.

The firm's takeover comes 15 years after Innovation Group raised £300m in proceeds as it listed on London stock exchange. In 2009, the business experienced a management reshuffle leading Andy Roberts to take the helm as CEO. Since then, the company claims its market capitalisation has jumped from £50m to the £433m reported on 27 August 2015. 

Last December, the software developer announced it would restructure its business model via new acquisitions in the European market, the closing of one of its motor-focused divisions in Australia and the transfer of an office to North America.

Debt
The transaction was supported by a £230m debt facility arranged jointly by Barclays and HSBC.

Company
Founded in 1996 as Merlinace, Innovation Group rebranded in 1999 and has since developed software used by the insurance, automotive and property sectors, among others.

Headquartered in Hampshire, the company works with a 1,100-strong client base in the UK, Germany, France, Belgium, Spain, Poland, Australia, India, Pakistan and North America. With a workforce of 3,000 professionals, the company posted £209.8m in revenues and £27.5m in profit before taxes in 2014.

People
Carlyle's work on the deal was led by managing directors Eric Kump and Zeina Bain. David Thrope is Innovation Group's current non-executive chairperson.

Advisers
Management – Investec (Corporate finance).

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