VC-backed Alaric sold to NCR

Ellie Pullen
03 December 2013

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NVM Private Equity, Foresight Group and Mobeus Equity Partners have sold London-based fraud prevention software provider Alaric Systems to NYSE-listed NCR Corporation for $84m.

NVM, which held an approximate 38% stake in the company, reaped a 4x return on the sale. The firm appointed SunTrust Robinson Humphrey, the corporate finance arm of SunTrust Bank, to test the market for a strategic buyout. The sale attracted several trade players.

NVM was a founding investor in Alaric. In its first five years as an investor, NVM focused on building up Alaric's product base. The company then won a contract with American Express to replace the company's existing card authentication structure.

NCR paid 5.5x Alaric's revenue to acquire the business, said NVM chairman Tim Levett. Alaric has been purchased for NCR's financial services division, with the aim of bolstering NCR's position in the financial technology (fintech) market. NCR, which has historically been a largely hardware-focused company, is currently making strategic investments to enter the software market for its industry.

NCR is a NYSE-listed provider of consumer transaction technology and services, headquartered in the US city of Duluth, Georgia, with 26,000 employees. The company generated a $5.73bn turnover in 2012.

Previous investments
NVM first backed Alaric in June 2000 with a £2.3m investment. Then firm was then joined by Foresight in a subsequent funding round in 2002.

Due to the financial crisis, NVM reinvested in the company some years later to build Alaric's market recognition.

In total, NVM has invested £5m in Alaric, while Foresight has provided £2.4m.

In April 2008, Mobeus became sole manager of the Income & Growth VCT (I&G), a fund previously joint-managed by Foresight and Mobeus. The vehicle, which was previously named TriVest VCT, held an investment in Alaric.

Company
Founded in 1997, Alaric is headquartered in London with additional offices in Rome, Dubai, Kuala Lumpur, Melbourne and Dallas. The company employs 117 staff and recorded turnover of £8.7m in the year ending March 2012, as well as an EBITDA of £1.93m. The figures represent a respective 50% and 95% increase from 2011, with turnover increasing from £5.8m and EBITDA increasing from £990,000 in 2011.

Alaric develops software for fraud prevention and payment processing. The company currently counts 50 financial institutions, retailers and processors as customers across Europe, Asia, Australia, the Middle East and the US.

People
Mike Alford is the CEO of Alaric. Tim Levett is chairman of NVM, while David Hughes is a partner in the private equity team at Foresight. Levett has sat on Alaric's board of directors as chairman for the last five years.

Advisers
Vendor (NVM) – SunTrust Robinson Humphrey, Larry DeAngelo (Corporate finance); Wragge & Co, Ian Piggin (Legal).
Acquirer – Shakespeares, Roy Botterill (Legal).