Gresham House’s Baronsmead VCTs have exited their stake in compliance software business Ideagen following its sale to private equity firm Hg Capital. The deal values Ideagen at £1.1bn, making it the first Baronsmead VCTs unicorn in pound sterling at the point of exit.
The Baronsmead VCTs’ investment generated a 13.5x return at the point of exit, with Hg Capital’s take-private deal completing in July 2022.
Ideagen is a Software as a Service (SaaS) business focused on helping companies in highly regulated industries – including banking, insurance and healthcare – comply with regulation and manage governance risk. Established in 1993 and headquartered in Nottingham, the business has become a leader in the $30bn-plus regulatory and compliance software space – an attractive sector supported by long term structural growth drivers.
The Baronsmead VCTs first invested in Ideagen in December 2012 shortly after the company was admitted to the AIM market, becoming one of its largest shareholders. The investment supported the business in growing its revenue from £4mn in FY12 to more than £90mn in FY22, and increased EBITDA from break-even to more than £30mn over the same period. The Baronsmead VCTs also supported a major transition in Ideagen’s management team, with former CEO David Hornsby appointed executive chairman and subsequently non-executive chairman prior to his retirement from the board, while Ben Dorks took over as CEO in 2018.
Managed by Gresham House – the specialist alternative asset manager with £7.3bn in assets under management – the Baronsmead VCTs are hybrid VCTs, with public and private equity portfolios that look to deliver consistent returns and dividend yields for shareholders. The Baronsmead VCTs sit alongside the pure-play private equity Mobeus VCTs, which Gresham House acquired in 2021. Gresham House’s private and public equity teams specialise in high-growth, scalable and technology-driven businesses in the tech, services, consumer, healthcare and education sectors.
The deal builds on a strong first half of the year for Gresham House’s venture capital arm, which has seen its deal activity reach £30.1mn year to date.
Ken Wotton, managing director, public equity at Gresham House, says:
“The success of our investment in Ideagen is testament to the Gresham House team’s ability to identify standout businesses and support their growth journey. The success of the business is a testament to the vision, drive and first rate execution of David, Ben and team over many years and we expect the company to continue to go from strength to strength under Ben’s leadership and its new ownership. This is a fantastic result for Baronsmead shareholders and emphasises the value of the VCTs’ hybrid investment strategy, with both our public and private holdings delivering attractive long-term returns for investors.
“Our exit from Ideagen is a positive outcome for all parties, delivering an impressive multiple for the Baronsmead VCTs, ensuring further capital to support the next phase of Ideagen’s growth, and aligning well with Hg Capital’s strategic priorities.”