PE’s top five home runs of 2011

Matrix Private Equity Partners and Foresight Group sold software company App-DNA to American trade player Citrix Systems for $92m earlier this week - reaping a mouth-watering 32x multiple and a 240% IRR on the combined £750,000 they invested in 2003.

While this exit effortlessly tops the year's charts so far, here are another four deals that undoubtedly cheered up LPs and GPs alike in 2011.

Zeus Technology, July - SEP and DFJ (12.2-15x)

The $110m sale of UK-based software company Zeus Technology to trade buyer Riverbed made a couple of VCs very happy: DFJ Esprit stated it made 15x its money on the equity injected at the time of the company's recapitalisation in 2004, while SEP reaped a 12.2x multiple on its 2005 investment.

If ever there was proof that you don't always get it right the first time, Zeus is a case in point: previous investments were written off in 2004 following the failure of the initial business model, centred around web servers development. Now refocused on online load balancing and traffic management solutions, Zeus is believed to be generating revenue in excess of $15m.

The Foundry, March - Advent Venture Partners (double-digit multiple)

Advent Venture may have seemed like it went out of its comfort zone when securing a majority stake in visual effects software developer The Foundry in 2009. Think again - barely two years later it sold the business to Carlyle, a deal reported to be valued in the £75-100m range. The move clearly paid off for Advent, as the firm is believed to have reaped well in excess of 10x its original investment.

Better still, the sale kicked off a hat-trick of successful exits for Advent. Following the Foundry deal, the firm partly exited French video sharing website Dailymotion and sold Swiss software business Zong to Ebay - netting an average 6x return.

Crown Paints, June - Endless (10x est.)

Turnaround houses know they are playing a very risky game. Endless may have been unlucky with the Amdega write-off in April, but it knocked it out of the park with the Crown Paint trade sale two months later. The paint manufacturer was valued at the upper end of the £100-150m range, allowing Endless to score a double-digit multiple on its 2008 investment.

As well as careful sourcing, the exit also rewarded diligent work: once a loss-making, unloved division of Akzo Nobel, Crown Paints now has an EBITDA of £20m on sales of £180m.

Airclaims/Ascend, June-September - LDC (>10x)

Small buyout houses can also have their moment of glory, as demonstrated by LDC this year: the firm reaped a money multiple of more than 10x on the combined sales of claims provider Airclaims to McLarens Young International and Ascend to Reed Business Information.

LDC backed the £10m MBO of Airclaims in January 2005. Splitting data and analysis arm Ascend from the main business in 2006 paid off on the exit, while in the meantime Airclaims profits more than trebled from just less than £2m in 2005.

Save for the App-DNA exit, these multiples may pale in comparison to those seen in the heady days of the market - when SEP reaped 70x its investment in Wolfson in 2003, or when Greenfield Capital Partners made 50x money on Telfort in 2005. But their significance shouldn't be downplayed: in a gloomy macro environment, these exits highlight that good PE firm don't necessarily time the markets, but are able to generate superior risk-adjusted returns in all cycles.

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• Topics
• Exits
• Scottish Equity Partners
• Mobeus Equity Partners
• Foresight Group
• DFJ Esprit
• Advent Venture Partners
• Endless
• LDC