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2021-10-28
Press Releases

IK Partners to invest in Pr0ph3cy Group to become a French Leader in Cybersecurity

During European Cybersecurity month, consulting company Silicom and e-learning SaaS platform Seela have announced their merger to create Pr0ph3cy Group (“Pr0ph3cy” or “the Group”), a provider of IT and cybersecurity services in France. Pr0ph3cy will serve large private groups and government agencies to provide solutions for their critical security needs and will offer an e-learning platform aimed at upskilling or reskilling IT, network and cyber professionals.

By anchoring the Start-up mindset with a well-established SME in the French ecosystem, Silicom and Seela will demonstrate with this new group their ambition to actively participate in the emergence of European industrial sovereignty.

The Group has signed an agreement with IK Partners (“IK”) who will acquire a significant minority stake in the Group alongside Arthur Bataille, who will retain control and management of the business.

The transaction was led by IK’s Development Capital team and is the first investment from the dedicated pool of Development Capital in the IK Small Cap III Fund, which held a final close at its hard cap of €1.2 billion earlier this year.

European Ambitions

IK, together with management, will further develop the Group through five key goals:

  • Become the French leader in securing technological products by mastering the design and integration of “Secure by Design” as well as the technical training for these products;
  • Consolidate the French cybersecurity ecosystem around its training solution to promote its technical and technological excellence internationally;
  • Recruit over 100 individuals in 2022 in France, Europe and Canada to support its clients in their growth strategies and in the securitisation of their digital products and services. This organic growth strategy could be accelerated by targeted acquisitions facilitated by its new financial partner IK;
  • Accelerate the technological shift of cybersecurity through Artificial Intelligence around SOC (Security Operation Centre) – the centre of operations focused on monitoring threats – and SIEM (Security Information Management System) – the monitoring tool used by analysts that includes software to monitor enterprise networks; and
  • Reinforce digital sovereignty and accelerate the upskilling of cyber professionals to safeguard jobs and the French economy in the digital field.

Arthur Bataille, Founder and CEO of Pr0ph3cy Group:Pr0ph3cy is a vision, a concept around innovation and the evolution of the cybersecurity market in France and internationally. As the market continues to evolve it is a decisive moment in our development. While cyber issues gain dominance, the French government is aware of the importance of reinforcing the digital security of organisations. The time has come to invest with the goal to create and promote French and European champions. To this end, we must also foster employment and training of cyber jobs in the context of talent shortage.”

Pierre Gallix, Partner at IK Partners and Advisor to the IK Small Cap III Fund: “Pr0ph3cy benefits from tremendous potential in its two business lines. We have every confidence that Arthur and his team will actively contribute to the rise of the cybersecurity market and we are very happy to support him in the deployment of his strategy.”

Pr0ph3cy PR Contact:
Leslie Toledano
Bureau de presse Leslie Toledano
+33 (0) 6 10 20 79 60
contact@leslietoledano-pressoffice.com

IK Partners PR Contact:
Maitland/AMO
James McFarlane
+44 (0) 7584 142665
jmcfarlane@maitland.co.uk / ik-maitland@maitland.co.uk

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2021-10-27
Press Releases

IK Partners acquires Plastiflex

IK Partners (“IK”) is pleased to announce that the IK Small Cap III Fund will, alongside management, acquire Plastiflex Group N.V. (“Plastiflex” or “the Company”) from 3d investors. Financial terms of the transaction are not disclosed.

Plastiflex is the market-leading global supplier of high-end customised tube system solutions for the healthcare, industrial and appliances markets. Operating seven manufacturing facilities and with a presence across four continents, the Company serves a long-standing and diversified base of blue-chip customers.  

Under the ownership of 3d investors and through its technological innovation and state-of-the-art solutions, developed by its research and development functions, Plastiflex has been able to penetrate and acquire significant market share in the healthcare and industrial markets. IK’s partnership with Plastiflex is aimed at driving further above market organic growth in the healthcare segment with share of wallet gains at existing clients, new client acquisitions and expansion of its innovative product offering to increase the addressable market.

Plastiflex will continue to be led by Chief Executive Officer (“CEO”) Piet Gruwez and his team, who will also be reinvesting alongside IK.

Piet Gruwez, CEO of Plastiflex, commented: “We’re delighted to have IK’s support in continuing to deliver the very best solutions to customers who all operate with complex requirements and in markets benefitting from long-term growth trends, including healthcare and industrials.”

Sander van Vreumingen, Partner at IK and Advisor to the IK Small Cap III Fund added: “Plastiflex is a high potential business with a very interesting market positioning. We’re delighted to be partnering with the Company and its top-quality management team to further their growth ambitions, both organically and through strategic mergers and acquisitions.”

Completion of the transaction is subject to legal and regulatory approvals.

For further questions, please contact:

IK Partners
Maitland/AMO
James McFarlane
+44 (0) 7584 142665
jmcfarlane@maitland.co.uk / ik-maitland@maitland.co.uk

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2021-10-26
Press Releases

IK Partners to acquire leading IT services provider CONET from H.I.G. Capital

IK Partners (“IK”) is pleased to announce that the IK IX Fund has signed a definitive agreement to invest in CONET (“the Company”), a leading IT consulting, systems integration and software development company. IK will be acquiring a majority stake from H.I.G. Capital (“H.I.G.”) with CONET’s management team investing alongside IK. Financial terms of the transaction are not disclosed.

CONET offers SAP consulting, communication solutions, software development and managed services to the public and private sectors. Founded in 1987 and headquartered in Hennef, Germany, the Company employs over 1,100 people in 13 offices across Germany, Austria and Croatia.

H.I.G. Capital invested in CONET in May 2017 and has since supported the management team as the Company has increased its share in the fast-growing IT services and consulting market as well as completed a series of strategic add-ons including ACT in 2017, Babiel in 2019 and Procon IT in 2020.

Together with IK, CONET plans to continue its growth plans in the DACH region by building on its existing capabilities and its strong position with public as well as private sector customers.

Completion of the transaction is subject to clearance by the relevant antitrust authorities.

Mirko Jablonsky, Partner at IK and Advisor to the IK IX Fund, said: “We are impressed by CONET’s strong track record across a diversified customer base, made possible by its driven management team and their talented colleagues with deep experience across their core markets. Building on its established, market-leading position across public and private sectors, CONET has an exciting period of growth ahead which we are delighted to support.”

Anke Höfer, Chief Executive Officer of CONET, said: “We look forward to partner with IK as we enter the next stage of growth for CONET. The trend towards digitalisation is accelerating and we believe we can capture this demand with our unique combination of IT expertise, sector knowledge and dedicated workforce of experienced consultants. We are grateful to H.I.G. for their support over the last four and a half years.”

IK Partners PR Contact:
Maitland/AMO
James McFarlane
+44 (0) 7584 142665
jmcfarlane@maitland.co.uk / ik-maitland@maitland.co.uk

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2021-10-15
Press Releases

Netel listed on Nasdaq Stockholm

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, FULLY OR PARTLY, DIRECTLY OR INDIRECTLY, WITHIN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, SINGAPORE, SOUTH AFRICA, SWITZERLAND OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, DISTRIBUTION OR PUBLICATION WOULD BE UNLAWFUL OR REQUIRE ADDITIONAL REGISTRATION OR ANY OTHER MEASURE THAN WHAT IS REQUIRED UNDER APPLICABLE LAW.

Netel Holding AB (publ) (“the “Company”), a full-service specialist within Infranet services in Sweden, Norway, Finland and Germany, today announced the outcome of the Offering of the Company’s shares (the “Offering”) and the listing of the Company’s shares on Nasdaq Stockholm. The Offering attracted strong interest from Swedish and international institutional investors as well as the general public in Sweden, Norway and Finland and was oversubscribed.

For more information, please see https://netelgroup.com/

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2021-10-11
Portfolio Company News

Mecenat Adds New Affinity Group to its Focus through Acquisition of Seniordays

With more than 1.3 million students and alumni as its members, Mecenat (“the Company”) is a leading marketing channel for vendors looking to reach young individuals in Sweden.

Through the acquisition of Seniordays the Company will add another attractive affinity group, of c. 130,000 members, consisting of the increasingly more digitally active consumer category of individuals over 55. Seniordays has displayed strong growth and is expected to have a turnover of MSEK 10 during 2021.

“Seniordays has a corporate culture and business model that is well aligned with Mecenat and has a strong focus on offering unique and relevant discounts to its members, translating into a high conversion rate for its customers. Mecenat has already successfully expanded its student member base to include alumni and will now be able to offer its customers an equally efficient marketing channel towards those over 55. I am convinced that this will have a positive impact on both sides leading to an even better offering to our members”, said Jonas Levin, CEO at Mecenat AB.

For more information contact:
Jonas Levin, CEO at Mecenat AB
Tel: 070 689 19 01
Email: jonas.levin@mecenat.com

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2021-10-1
Articles

GP Workshop: How to successfully engage in a cross-border transaction

Simon Finn, Managing Partner at Intriva Capital discusses how to diligence and enter cross-border transactions, while IK Partners CEO Christopher Masek, discusses post-deal navigation.

Simon Finn, Managing Partner, Intriva Capital

I would rank the areas that funds should consider when embarking on cross-border deals in two main categories: pre-deal and post-deal. It’s no good being the victor of making an investment in a jurisdiction if ultimately the execution and the asset management turns out to be much more complicated or if there are issues after signing the deal.

Key Considerations

I would put regulation as the number one factor to be considered when it comes to cross-border deals. That dovetails into what you can and can’t do in an investment and with an asset post-acquisition.

The second key consideration is tax as the landscape is constantly moving. So, even if you think you had all of the facts at one stage, when it comes to considering the same type of deal 12 months later, you cannot just pull out the same playbook from the last deal.

Legal requirements differ by country and must be fully understood to ensure a deal can proceed. As with regulatory and tax issues, you should also examine legal constraints at the opportunity stage, when considering if a deal is viable.

After legal, we look at the management style of each company and the nuances of the country’s culture. It is important to recognise that while the senior leadership of most mid-market companies across our target geographies can converse in English, that doesn’t always mean that they’re on the same page culturally. This is why having a local presence is incredibly important, ensuring that the deal team has an appreciation and understanding of cultural nuances and communication styles. This should come into consideration both pre- and post-deal, to mitigate risks. At Intriva, we have a team coach that gets involved in some of our transactions when we want an assessment of certain personalities and management teams.

Finally, the availability of finance needs to be considered. Different jurisdictions can differ considerably on this. So, having a really strong understanding of debt capital markets is very important as that is at the heart of commercial assumptions on a deal.

Advisory DD

When you are not too familiar with a certain jurisdiction, there is also a requirement to diligence the types of advisors and advice that you partner with. The answer isn’t simply the same law firm that you use in your home country, especially if the deal requires diving into a niche industry-specific advice. It’s much more than a beauty parade; you are almost diligencing and referencing advisors before engaging with them. This can take some more time in terms of getting the wheels in motion to be able to start evaluating an opportunity, but it really pays off in the long term.

Christopher Masek, Chief Executive Officer, IK Partners

Cross-border deals are really one of IK Partners’ strengths and a key element in our toolkit. When we are dealing with portfolio companies, it’s [cross border deals] where the private equity professional has a lot of legitimacy.

Add-Ons

What we do systematically in all of our platform deals is that we identify upfront, on average, at least 13 add-ons. For us, it’s an important component because it’s a very tangible means of accelerating a company’s strategic repositioning. When you’re doing a deal, you seldom come across a management team that doesn’t want to do that, particularly where they’re moving from Small Cap to Mid Cap.

It’s a very competitive market out there and we find ourselves when we are competing with peers who are often national funds. In many cases, we have had situations where we’ve said: “We’ve met with management of these targets and they want to transact. If you do the deal with us, we will do that immediately.” Then, you have a very powerful and compelling argument in your favour.

Cultural Nuance

We have seven European offices. So, when we’re meeting with a company based in the UK, where it’s confronted with Brexit for example, they’re saying, well, we want to make sure that we have a partner that’s credible; one that can help us develop successfully on the continent. This is where we’re able to go through that whole list before we do the deal.

What you have to consider when you’re doing this [a cross border add-on] is how you’re going to incorporate the team. You’ll have cultural challenges to consider, where, for example, you may have a family-owned business to navigate and integrate. Often, you may want to reserve some equity for partners that you intend to add, so that they can have an aligned interest with the business, as well as be added onto the board.

Financing

When you’re transacting in this way, you also want to get your financing right. When you’re doing your deal originally, if you say we’re going to do a buy-and-build, what we will typically do is over-equitise the deal and incorporate specific financing facilities to help execute this. The better and more sophisticated you are in doing this, you will have terms which, for instance, allow you to do things pretty automatically. For example, just a simple due diligence report, where you can even do pro formas and add synergies into it and really build your case around having automatic adaptive financing for it.

QUOTES:

“When negotiating with international counterparties, it’s especially worthwhile pausing to consider both the form and channel of deal communications, particularly in light of cultural and/or language differences. Formally recognising the status that certain individuals hold in the discussions (and any other local customers or protocols) can be an important first step in building trust between the parties and ultimately drive a successful outcome. We increasingly see bidders make greater use of shared IT platforms to move through the initial commercial and documentation stages more efficiently. Whilst this has real benefits in terms of speed of execution, buyers in particular need to be mindful that some points are still best aired in private on a one-to-one basis.” Ben Shribman, London Partner, Cooley

“You need to get local advice on the ground and to be fully aware of the regulatory and legal environment that you’re dealing with. If you assume that the same regulatory and legal systems will apply, then you’re likely to undergo a challenging process. GPs need to understand this very early on and be in close conversation with the target’s management team and advisors. Not planning can lead to significant issues later on. In addition, you will need to have a really good grasp of the personalities involved, because, inevitably, it could be that some targets may not be familiar with a deal from the jurisdiction that you are in. Where we see most deals fail is actually where there is a lack of understanding around the personalities involved and what is needed for the deal to successfully close.” Gareth Davies, Private Equity Partner, Browne Jacobson

“Political and regulatory strategic planning is increasingly central. Understanding nuance and complexity is vital in road testing the viability of existing business models and future proofing assets to capitalise on change. Risks that look disparate and unrelated now will often overlap in the future: we can think for instance of logistical costs, the net zero agenda, and nationalistic attempts to impose new barriers on foreign trade. There are few sectors that are insulated from these questions, and many – from industrials to TMT to healthcare – that can only secure commercial stability through such strategic foresight.” Tom King Practice Lead, Global Counsel

“The key for success in cross-border transactions is thinking ahead and proper communication with the international deal team. It is important to give clear instructions and detailed guidance about what is required and expected from each jurisdiction as early as possible. This includes setting up and coordinating appropriate workstreams. Every member of the international deal team should know from the outset what has to be delivered by when and who the contact is with the home team for any questions and comments. Further, reasonable costs are a key factor for successful transaction management. The best practice to achieve effective cost control is to provide weekly time reports which keep the client up-to-date and avoid surprises when it comes to billing.” Ralf Kurney, Co-Head of the CMS Private Equity Group

“There is increased regulation worldwide – including foreign direct investment (FDI) regimes in Western and Eastern Europe, the Nordics and in the UK.  These regimes are still being tested and can meaningfully impact deal timetables.[…]Knowing the local market can make a big difference when preparing a competitive offer. Bidders want to work with local advisers who not only know the local law, but also how their local market works and how a bid will be received. That means appointing the right advisers early in the process, including local counsel where needed, to make sure that they’re on our tree and we’re aware of all relevant issues.” Dan Graham, Private Equity Partner, Sidley Austin

This article was first published in Real Deals on 30 September 2021 and was written by Talya Misiri.

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