Gyro International (United Kingdom) - Jan 2008

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01 January 2008

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Octopus Investments, Matrix Private Equity Partners, Electra Quoted and Beringea have sold B2B marketing services company Gyro International Ltd to US-based Pegasus Capital Advisors for $97m. The divestment yielded returns of 2.3x and an IRR of 58% for Octopus and recouped 3.2x and an IRR of 50% for Matrix. In cash terms, the exit earned Matrix £2.4m from its £750,000 investment in 2005. The exit came about as the vendors began to contemplate a full process and then received a direct offer from Pegasus. Chris Allner led the exit deal for Octopus, Ashley Broomberg for Matrix, Trevor Hope for Beringea and Mark Speaks for Electra.

Previous funding

Octopus led the £3m buyout of Gyro in February 2005 (7 March 2005, page 28). It invested alongside Beringea, Electra and Matrix to buy out one of the original partners. This was followed by additional funding totalling £6m provided in October 2006 to enable Gyro to make acquisitions (4 December 2006, page 23). Together, the institutions owned a significant minority stake in the company. There was no debt involved on either original funding round, although the business did take on some borrowings from HSBC in late 2007. During the course of the investors’ involvement in Gyro, it completed five acquisitions, three of which were in the UK, with one in France and one in Sweden. In addition, the business has also shown strong organic growth – expanding from four offices to 10 during the investment period. At the time of the exit, Gyro recorded an EBITDA in excess of £2m on a turnover approaching £40m and employed approximately 300 staff.

Advisers

Equity - BDO Stoy Hayward, Jonathan Breach, Jonathan Hickman, Simon Evans (Corporate Finance)Equity - Berwin Leighton Paisner, Keeley Hibitt, Michael Anderson (Legal)Purchaser - Akin Gump Strauss Haver & Feld, (Legal)Purchaser - MAZARS Hemmelrath, (Financial Due Diligence)