Nottingham-based information management software provider Ideagen has agreed to a £1.1 billion takeover from private equity firm Hg Capital.
In a statement on its website, Ideagen officially revealed the news. That said, other interested parties could step in. Sky News notes that Astorg may yet make an offer. A third potential suitor, the private equity firm Cinven, walked away on Thursday last week.
Hg partners Christopher Fielding, Joris Van Gool and Jean-Baptiste Brian explain: “Our experience in the sector gives us strong conviction that Ideagen represents a high-quality platform, and we are committed to providing additional capital and resources that are required to further support and enhance Ideagen’s next phase of growth.”
They add: “We strongly believe that the core of the business should be maintained in its Nottingham base, including its executive team and technological development centre.”
Ideagen has about 700 staff across the globe. Its operations are located throughout the UK, US, Australia, Europe, Middle East and South-East Asia. It provides quality, audit and risk software – and is used by about 8,000 customers across various industries such as aviation, financial services, life sciences, healthcare and manufacturing.
Whoever gets its hands on Ideagen, will get access to some notable customers. Names include Heineken, British Airways, BAE, Aggreko, US Navy, Bank of New York and Johnson Matthey, as well as 250 hospitals across the UK and US.
There’s also good news as 88% of Ideagen’s revenues are recurring due to being subscription based.
In its most recent financial results, for the six months to the end of October last year, Ideagen reported a 33% rise in sales to £38.8 million. Underlying earnings rose by 32% to £13.2 million and it generated net cash of £10.5 million, up from £7.9 million in the same period a year earlier.
However, Sky News cites house broker Shore Capital, which says Ideagen is expected to make a pre-tax profit of £23.2 million on an adjusted basis. That’s not a huge initial return for a purchase price of £1.1 billion, but Hg could be looking to the long-term opportunities.
In terms of Ideagen’s previous activities, it has been busy.
Back in December 2021, Ideagen raised £103.5 million to be used for product investment and more acquisitions.
Its acquisitions include London-based Mail Manager for £26.4 million; software validation and assurance company CompliancePath for £9 million; and Sydney-based regtech provider CompliSpace for AU$105 million (£57.7 million).