About the company
Nutrition 101 is a food waste and recycling company and a go-to partner for food manufacturers seeking sustainable waste management solutions. The company cost-effectively converts food waste into affordable and nutritious livestock feed, compost and green energy products. As a result, food waste, landfill usage and greenhouse gas emissions are significantly reduced.
Investment rationale
- The company operates in a c.US$600bn dairy market that develops a variety of nutrient dense foods. The business is expected to benefit from the tailwinds supporting sustainable food production.
- There are significant barriers to entry due to the operational and technical know-how, physical assets and scale required.
- The company has visible revenue streams due to strong relationships and multi-year agreements with tenured blue-chip food manufacturers and customers requiring livestock feed.
Our relationship
Pantheon has a long-standing relationship with Altamont, having invested in several of their funds and it currently holds five advisory board seats with the manager. PIP has also previously co-invested alongside Altamont.
Active management and value creation
Altamont is a leading US mid-market buyout manager that focuses on companies with strong management that are undergoing a strategic or operational transition. It has identified several growth opportunities for Nutrition 101 to create value, which include the professionalisation of the company’s go-to-market strategy, optimising pricing and plant operations and geographic expansion across the USA.
About the company
JSI is a consulting and broadband solutions provider to the telecommunications industry in the USA. The business offers a complete range of financial, engineering, regulatory, operational, and strategic services to telecommunications providers that are focused on rural communities.
Investment rationale
- JSI is a differentiated, mission-critical service provider with an experienced team and long-standing history of delivering a high-quality service to its customers.
- The private equity manager believes that the telecommunications industry is at an inflection point following the USA’s recently passed Infrastructure Bill, which allocated a significant budget to the deployment of fibre across the USA.
- The need to close the connectivity gap between rural and urban areas in the USA, brought to light by the COVID-19 crisis, provides an additional opportunity for market penetration and growth.
- The business has grown its revenues by c.10% per annum since 2019 and it has a diverse and sticky customer base of broadband providers across the USA.
Active management and value creation
- Stone-Goff Partners is a New York-based private equity investment firm that acquires and builds companies operating in the lower middle market. The JSI management team and Stone-Goff, which has been an investor in the company since 2018, believe that there are several growth initiatives that can be implemented by the company.
- Under Stone-Goff’s ownership, JSI has a recent track record of executing transformative M&A. The acquisitions of N-COM, an engineering firm specialising in communication systems; and Mid-State Consultants, a leading full-service engineering and outside plant firm, expanded the geographic reach of JSI and diversified the company’s product offering.
- JSI’s latest acquisition of Mitchell Engineering, a provider of engineering and design services to telecommunication clients in Arkansas, Oklahoma and Eastern Texas, continues this expansion.
- Stone-Goff sees the cross-selling of additional services obtained via M&A to JSI’s existing loyal customer base as a key route to value creation. The company has a strong M&A pipeline with which it can continue this strategy.
About the company
Marlink Group (“Marlink”) is a global leader in intelligent networks and digital solutions for business-critical remote operations.
Investment rationale
- Broadband usage in the maritime industry is expected to keep growing due to the increase in satellite capacity, demand for data and bandwidth by maritime operators and innovation of communication equipment.
- Marlink has long, established relationships with a wide portfolio of satellite operators, and is an attractive platform for integrating participants in all parts of the satellite communication distribution value chain.
- Technology, media and telecom is one of the sectors that Apax France specialises in, and it had prior knowledge of the company and a strong relationship with management.
- Opportunity for margin expansion through migration towards broadband VSAT (Very Small Aperture Terminal) solutions, economies of scale in satellite purchasing and network management, operations automation and accretive value added digital services.
Our relationship
PIP is a primary investor in two Apax France funds and Pantheon holds an advisory board seat for three of its funds. In addition, PIP has previously co-invested alongside the manager.
Active management and value creation
- Seven acquisitions completed until partial sale in June 2022. One additional acquisition conducted in September 2022.
- Marlink has become a world leader in maritime and enterprise satellite communication services and has over 12,000 vessels under contract of which over 7,000 (under 2,000 at entry) are vessels that have broadband installed.
- Repositioning and scale of the Land division (from negative EBITDA at entry to c.US$30m in 2022).
- Expansion of the digital offering across Marlink’s subscriber base through value added and managed services (eg, cyber, Internet of Things).
Exit
Marlink was acquired by Providence Equity Partners in June 2022, providing a partial exit for Apax France funds and PIP at a 2.5x Multiple of Invested Cost (MOIC).
About the company
MiQ is a data analytics company serving the programmatic advertising market. Through its proprietary platform, MiQ processes and connects large sets of diverse data and converts the data into customer insights. The business then uses those insights to build specific audiences, providing its clients with a strong return on investment for their digital advertising spend.
Investment rationale
- Consistent exceptional growth with digital display advertising growing at 20% p.a. over two years.
- MiQ has a proven track record of expanding into new territories, launching eight new offices in six years, all of which became profitable quickly.
- Strong barriers to entry through the proprietary platform developed by the business, as well as long-term relationships with all of the large tier-one agencies who control c.70% of media spend globally.
- Significant geographic diversity with revenues spread across the UK, North America, Europe and Australia and with scope for further expansion into other international geographies.
- MiQ generates a superior return on investment, compared to its competitors, as a result of its high performance-focused culture.
Our relationship
PIP is a primary investor in two ECI Partners funds and Pantheon has held an advisory board seat in the last six of its funds.
Active management and value creation
- Organic growth of 27% and 31% CAGR in terms of revenue and EBITDA over the five-year holding period.
- Developed and executed a North American and Asian expansion strategy, leading to four new US offices and an increase in North American revenue to over 80% of total group revenue upon exit.
- Client direct customers that now account for 15% of revenue versus none at entry.
- Hired a new management layer beneath the founders enabling the business to scale up in key markets.
Exit
MiQ was acquired by Bridgepoint Advisers in September 2022, providing a full exit for ECI and for PIP at a 5.9x Multiple of Invested Cost (MOIC) and 49% IRR. The uplift versus the valuation 12 months prior was 296%.
About the company
Biolchim specialises in the production and commercialisation of bio-stimulants and specialty fertilisers. These enable farmers to improve the quantity and quality of their crops while using less water and chemical fertilisers.
Investment rationale
- Biolchim is a producer of environmentally-friendly bio-stimulants, made mostly from raw materials of natural origin.
- Potential to improve product mix and focus on highly specialised products.
- Opportunity for further international expansion, both organically and through acquisitions.
Our relationship
PIP is a primary investor in three Chequers Capital funds and Pantheon holds an advisory board seat for each fund. In addition, PIP has previously co-invested alongside Chequers Capital.
Active management and value creation
- Increased the quality of the business by improving the efficacy of the products, building a larger portfolio, strong research and development, and better financial performance.
- Increased awareness among fertiliser manufacturers of the need to offer greener products.
- International expansion to over 50 countries with production facilities in Europe and South America.
- Strong performance across subsidiaries in China, Brazil, Hungary and Italy.
- Pricing power, with the ability to re-price products and services in an inflationary environment.
- Successful management of the operations and supply chain resulting in EBITDA, growth including during a period of increasing raw materials prices and energy costs.
- Biolchim achieved a three-year earnings revenue CAGR of 8% and three-year earnings CAGR of 14%.
- A large strategic multiple uplift accounts for most of the value creation and was achieved through positioning the company to be an attractive acquisition target for a large trade buyer.
Exit
Biolchim was acquired by US strategic corporation buyer, J.M. Huber, in November 2022 after a competitive selling process with several trade buyers took place. This provided a full exit for Chequers Capital and for PIP at a Multiple of Invested Cost (MOIC) of 4.2x and IRR of 36%. The uplift versus the December 2021 valuation was 40%.
About the company
Prosci is a change management firm focused on helping individuals and organisations build change management capabilities. It has a network of over 30,000 change leaders worldwide through the Prosci Change Management Certification programme.
Investment rationale
- Prosci is a market-leading provider of proprietary change management solutions in a US$10bn+ market.
- Proven history of growth in core offerings positioned to accelerate with newly launched digital training and advisory solutions.
- Ten-year revenue growth of 29% per year, 40%+ EBITDA profit margins and a diversified and quality customer base consisting of c.80% of the Fortune 100 companies.
Active management and value creation
During the investment period, Leeds Equity Partners plans to focus on the following key growth drivers:
- An accelerated rollout of the advisory business.
- Bolstering the subscription segment (currently c. 30% of revenue) by rolling out a subscription membership opportunity.
- Broadening and deepening channel partner relationships.
- Expanding the business through transformative M&A.
About the company
Seqens is a global chemicals and active pharmaceutical ingredients manufacturer. The company is a leading supplier of pain relief ingredients in both the Paracetamol and Aspirin supply chains. Seqens is headquartered in France with production facilities and R&D centres located globally.
Investment rationale
- The company is a vertically integrated producer of critical products and is strongly positioned to benefit from secular tailwinds, such as western reshoring initiatives, which de-risk supply chains, and growth in pharmaceutical supply chain outsourcing.
- In addition, Seqens has historically been an undermanaged asset, and SK Capital Partners (“SK”) has identified significant value creation opportunities.
Our relationship
- Pantheon has been investing in the manager since 2018 through three primary funds. SK is a sector specialist; they are focused exclusively on the pharmaceutical, chemicals and materials industries.
Active management and value creation
- SK has strategically merged Seqens with another of its portfolio companies, Wavelength Pharmaceuticals, which is a complementary active pharmaceutical ingredients manufacturer. The combination creates a scaled leader in the sector with a global presence and multiple opportunities for synergies.
- The private equity manager believes that significant operational improvements can be made to the business to create value. The company will benefit from SK’s experience in the sector and their ability to reposition the company to drive growth both organically and through M&A.
About the company
Kroll Bond Rating Agency is one of the five global full-service credit rating agencies. The business was founded in 2010 with the aim of restoring trust in credit ratings by creating new standards for assessing risk and offering transparent ratings. It is differentiated through the quality and rigour of its research, its ability to rate niche asset classes with bespoke methodologies, and its competitive pricing.
Investment rationale
- The addressable market for credit rating agencies is large with very few players and significant barriers to entry.
- The company has a highly attractive financial profile, with a fixed cost business model and substantial pricing power, which leads to high EBITDA margins and strong cash flow generation.
Our relationship
- Pantheon has a long-standing relationship with Parthenon Capital Partners (“Parthenon”) and is an investor in several of their funds dating back to the early 2000s. Pantheon has also participated in several co-investments with the private equity manager and sits on two of its advisory boards.
Active management and value creation
- Parthenon has significant experience and an outstanding track record in the financial services sector, having made 25+ investments in financial services firms through its past six funds. With deep industry expertise and operational capabilities, Parthenon has the knowledge and resources to assist KBRA with its expansion.
- Parthenon sees numerous opportunities for growth in the business, including the penetration of new areas of the market, such as alternative asset managers and ESG ratings. In addition, international expansion and M&A are possible levers for value creation.
About the company
TriMech is a provider of 3D design, engineering and manufacturing solutions in the United States and Canada. The company was founded in 1998 and is headquartered in Virginia, USA, with locations in 15 states across the country and six further locations in Canada.
Investment rationale
- TriMech is one of the few businesses operating at scale in an attractive and growing 3D design and printing market. The global 3D computer-aided design software market is estimated to be c.US$10bn in size, and the 3D design and printing market is estimated to be c.US$14bn in size; both are expected to continue to grow in the coming years as companies utilise 3D software as part of product development.
- TriMech has a diverse customer base with long-standing relationships that provide high recurring revenues through multiple revenue streams. Sentinel Capital Partners (“Sentinel”) sees an opportunity to further diversify the company’s revenue through the acquisition of companies with complementary product offerings.
Our relationship
- Pantheon has a long-term relationship with Sentinel; it is a primary investor in three of Sentinel’s funds and has two advisory board seats with the private equity manager.
Active management and value creation
- Sentinel has worked on multiple investments with a similar profile to TriMech where M&A is a key component of growth.
- The company has made numerous accretive acquisitions in the past 18 months that have broadened its product line. It has continued to identify M&A opportunities to help consolidate the sector and provide cross-selling opportunities across complementary products, and has already completed one acquisition following our investment.
About the company
Accelerant is a technology enabled insurance exchange that connects underwriters, who do not have the capital of a traditional insurance firm, with risk capital providers. Altamont Capital Partners first backed the company in 2019 and has helped grow the business in the intervening period.
Investment rationale
- Differentiated and disruptive business model that is difficult to replicate.
- Large, growing and uncorrelated insurance market with substantial addressable market.
- Strong growth profile combined with an asset-light, highly profitable business model.
- Proven and experienced founding management team with strong alignment of interests.