About the company
Travel Chapter is a technology-enabled travel platform for self-catering holidays. Its headquarters are in Devon in the UK with a talented team of highly expert people and its leading brand, holidaycottages.co.uk, specialises in holidays across England, Scotland and Wales.
Investment rationale
- Acquisition of a leading UK holiday cottage platform with a strong track record of organic growth (new and repeat bookings, revenue and EBITDA growth c. 30% at entry).
- Deep immediate pipeline of M&A opportunities already identified at entry, with management having a demonstrated track record of successful bolt-on acquisitions.
- Large addressable market with sustainable tailwinds with proven resilience through economic cycles.
- ECI Partners (“ECI”) was able to gain preferential access to the opportunity as a result of a 20+ year track record in the travel sector and a 15-year relationship with the management team.
Our relationship
- PIP is a primary investor in four ECI funds and Pantheon holds an advisory board seat in each fund.
Active management and value creation
- Seven bolt-on acquisitions between February 2019 and December 2021, significantly expanding the geographic footprint and property base of the business.
- Executed the largest transaction to date of “Sally’s Cottages”, adding 500+ properties in the Lake District.
- Supported the business with organic property growth, resulting in a significant uptick in sign-ups (1,502 in 2021 vs. 1,024 in 2019).
- Helped develop the technology team and a data team that implemented several data improvement projects.
- The business traded strongly through COVID-19, with annual revenue and EBITDA growth of 38% and 50% over the three-year investment period.
Exit
- Travel Chapter was acquired by Intermediate Capital Group in December 2021, providing an exit for ECI and for PIP and generating a 2.6 times cost multiple and 36% annual return over three years.
About the company
Ports America is the largest terminal operator and stevedore (loading and unloading of ships) in North America, handling c.26% of US container throughput. The company provides terminal management and a full range of stevedoring and labour services at more than 70 locations in over 33 ports.
Investment rationale
- Diversified portfolio of port terminals based across all major ports in the USA with a presence on all three coastlines: the Atlantic, the Pacific and the Gulf coasts.
- Attractive valuation entry point that was lower than both the long-term sector average and single terminal transaction multiples at the time.
Our relationship
- Pantheon has a long-standing relationship with the private equity manager and has evaluated multiple secondary opportunities with Oaktree Capital Management (“OCM”).
- Pantheon also holds an advisory board seat with OCM.
Active management and value creation
- The new management team that was implemented by OCM has been actively involved in transforming the business from a low-margin stevedoring provider to a higher margin container terminal operator with long-term contracts. The management team was supported by experienced professionals from OCM and was responsible for undertaking transformational acquisitions, removing redundancies and building a network of contracts to ensure stable cash flows.
- During the investment period, EBITDA margin expansion from 12% to 23% was achieved through:
- Cost savings through reductions in back office and support services.
- Exit of low margin sites.
- Optimisation of terminal layouts and expansion of terminal capacities.
Exit
- Ports America was acquired by the Canada Pension Plan Investment Board in November 2021, providing a full exit for OCM and for PIP.
About the company
Flynn Restaurant Group (“FRG”) is the largest franchise operator and one of the 20 largest food service companies in the USA. Its wholly-owned brands include Taco Bell, Panera Bread, Arby’s and Applebee’s restaurants.
Investment rationale
- FRG has c.2,355 stores in the USA that generate c.US$3.7bn in annual revenues and employ c.73,000 people. In 2021, FRG was a part of the largest franchise transaction in American history when it purchased 937 Pizza Hut restaurants and 194 Wendy’s stores for c.US$553m.
- PIP was offered an opportunity to invest alongside Main Post, a sector-focused sponsor with a strong investment track record.
About the company
Launched in 2014, Olaplex is a fast-growing independent haircare brand with patent-protected products backed by science. It offers a suite of products that use its technologically proven “bond–building” (repairing, strengthening and protecting hair bonds) formula. The company is the number one bond-building brand in the professional channel and a top ranked global brand in specialty retail.
Investment rationale
- Strong financial performance, with a 90% increase in net sales from 2019 to 2020.
- In 2020, Olaplex was the number one haircare brand at Sephora (a popular retailer for beauty products) based on sales, and five of its products were the bestselling ones in their respective categories at Beauty Systems Group (one of the leading distributors globally for professional/salon use haircare products).
- Large and growing global haircare market, particularly for products treating damaged hair.
- Significant product line extension opportunities and expansion of addressable market through patented technology and e-commerce.
Our relationship
- Pantheon has a well-established relationship with Advent International Group (“Advent”), dating back to 1998, and PIP is a primary investor in six Advent funds. Pantheon also holds an advisory board seat for various Advent funds.
Active management and value creation
During the investment period, Advent has worked with Olaplex to:
- Strengthen its internal R&D team and successfully launch six new products (No. 0 Intensive Bond-Building Pre-Treatment in July 2020, No. 8 Bond Intense Moisture Mask in April 2021, No. 4-1 Moisture Mask in July 2021, No. 4P Blonde Enhancer Toning Shampoo in September 2021, No. 9 Bond Protector Nourishing Hair Serum in March 2022, and No. 4C Bond Maintenance Clarifying Shampoo in June 2022).
- Expand into international markets and evaluate new market opportunities.
- Navigate the business through the pandemic. Advent was able to use the digital expertise within its team to switch to an online sales-led strategy during the COVID-19 lockdowns when salons were closed. This enabled Olaplex to continue operating through the pandemic, and direct to consumer sales, which include Olaplex.com and sales through third-party eCommerce platforms, now account for 24% of its net sales as at March 2022.
Since the IPO of Olaplex in September 2021, Advent remains an active shareholder with three seats on Olaplex’s board of directors and continues to use its sector expertise and resources to support the company.
About the company
Headquartered in the UK, EUSA Pharma is a global, specialty in-licensing pharmaceutical company focused on oncology and rare diseases.
Investment rationale
- Established business infrastructure including a sales and marketing network, and a product portfolio and management team which EW Healthcare (“EW”) could leverage to grow the licensing platform.
- Pipeline of potential acquisition and licensing opportunities in Europe and the US targeting companies offering complementary products and distribution networks.
- EW’s prior experience in working with EUSA Pharma’s founder who had successfully built and grown two specialty pharmaceutical platforms alongside private equity deal sponsors.
- The credentials of EW which is one of the longest-established healthcare-focused growth equity and buyout specialist private equity firms in the world, having invested in over 150 companies to date.
Key products
- Qarziba: For the treatment of paediatric neuroblastoma. Neuroblastoma is a rare cancerous tumour that begins in the nerve tissue of infants and very young children. About 49% of neuroblastoma patients are in the high-risk category, meaning they have the greatest likelihood of relapse during treatment.
- Fotivda: For the treatment of renal cell carcinoma. Renal carcinoma is the most common form of kidney cancer and usually affects adults aged in their 60s and 70s.
- Sylvant: For the treatment of Multicentric Castleman’s disease (lymph node disorder). It is a rare disease that affects lymph nodes and other immune cell structures in the body and can severely weaken the immune system.
- Caphosol: For the treatment of oral mucositis. It is an inflammation of the mucosa lining around the mouth, and is one of the most common complications arising from chemo- and radiotherapies in cancer treatments.
Our relationship
Pantheon has a well-established relationship with EW Healthcare dating back to 2004. Pantheon holds an advisory board seat on the four most recent EW funds, and PIP is an investor in each of those funds.
Exit
EUSA Pharma was acquired by Italian pharmaceutical company Recordati in December 2021, providing a full exit for EW and for PIP. The overall return to PIP is c.5.0x of invested cost with the vast majority of the distributions already received during the financial year.
About the company
Satlink is a global leader in the development of technological solutions for the maritime sector, focusing on sustainable fishing. Its products optimise decision-making by fishing vessels and help regulators audit ethical fishing methods.
Investment rationale
- Satlink offers several different products, services and technological solutions to its customers. The company has an international presence and holds a market-leading position in a highly concentrated sector.
- The private equity manager, Ergon Capital Partners (“Ergon”), regards Satlink’s core business as a strong growth platform as it operates in a market with high barriers to entry, has a strong financial profile and low customer churn.
- Further sources of growth include an increased service offering, the possibility of enhancing its subscription model and developing a more extensive oceanography product range.
Our relationship
- Pantheon is a primary investor with Ergon and an Advisory Board member. Ergon had been tracking Satlink over several years and was ultimately attracted to it as the theme of technological disruption in a traditional market is consistent with several of their previous investments.
- As a result of the relationship between Pantheon and Ergon, PIP was offered the opportunity to co-invest alongside Ergon in this exciting company.
ESG approach
- Satlink’s products support sustainable fishing and contribute to the health of marine ecosystems:
- The company’s smart buoy products identify and distinguish schools of fish to make fishing more accurate by reducing the capture of non-target fish.
- Satlink’s technology helps preserve marine ecosystems by ensuring that only species with healthy stocks are fished, while the capture of vulnerable species is minimised.
- This results in better fuel efficiency in fishing vessels, and an overall reduction in their carbon footprint.
- Satlink is an important asset to the global ocean protection movement; it has strong links to non-governmental organisations such as charities that focus on the sustainability of fishing, and dedicates significant resources to increasing awareness of ocean sustainability. The company won a United Nations Global Compact award in February 2022 for its contribution to a more sustainable fishing industry and the preservation of marine life.
About the company
Affinity Education Group (“Affinity”) provides educational services and care, including daycare, before- and after-school care and occasional care for children through the ownership and management of its childcare centres in Australia. Affinity’s portfolio consists of over 150 daycare centres throughout Australia, supporting more than 15,000 children. More than 50% of Affinity’s revenue is derived from the Australian federal government, under its child benefit rebate scheme.
Investment Rationale
- As the third largest player in the Australian childcare market, Affinity enjoys brand presence and a geographic footprint which captures a core clientele.
- Supply/demand imbalance in the daycare market has resulted in attractive pricing for Affinity’s services.
- Increased funding availability from the Australian Government for childcare provision to support market growth.
- Anchorage Capital Partners (“Anchorage”) had a pipeline of 11 centres targeted for acquisition and were looking to reduce costs through the divestment of 15-20 underperforming centres.
- Anchorage engaged with Affinity management on ESG issues during the due diligence process and the company has satisfied requirements for all aspects including its employee approval systems, adherence to childcare regulations, absence of litigation and its employee assistance and whistle blower programmes.
Active management and value creation
Anchorage developed a comprehensive performance improvement programme to leverage the full potential of Affinity’s portfolio of early education long daycare centres. This included:
- Installation of a new leadership team and implementation of standardised systems and processes;
- Portfolio optimisation through the upgrade of centres and divestment of poor performers;
- Increased focus on delivering curriculum activities, and
- Refined marketing approach to capitalise on growing business momentum and word-of-mouth recommendations.
Exit
Affinity Education Group was acquired by Quadrant Private Equity in September 2021, providing a full exit for Anchorage and for PIP.
About the company
Star Health Insurance (“Star”) provides affordable medical insurance, accident insurance and travel insurance plans in India. Star is the largest private sector standalone health insurer in India, the largest in retail health insurance and the fifth largest health insurer overall. It operates with a network of c.11,000 hospitals across India. The company was a pioneer of in-house claims processing in India and employs a large team of in-house doctors to provide a seamless claims processing experience to its customers.
Investment rationale
- Health insurance is an underpenetrated and high-growth segment in India.
- Star has a c.55% market share amongst standalone health insurers in India and is a leader in the retail segment where it is harder to build scale compared with the corporate and government segments of the market.
- Star is one of the few general insurance players in this emerging industry in India and has been profitable since 2016.
Investment ESG credentials
- Star introduced a Coronavirus policy to cover Indian residents who test positive for COVID-19, offering a quick solution for people who have no health insurance cover but need protection against COVID-19.
- A dedicated employee COVID-19 helpline was set up offering COVID-19 advice to employees and for cases of hospitalisation or death from COVID-19.
- The company provided financial assistance for hospitalisation costs, funeral expenses, priority release of terminal benefits and hospital support.
- The company had a Corporate Social Responsibility budget of approximately $750k in FY 2021, which was spent on several activities such as maintaining public toilets, food distribution, a dialysis centre and support for sufferers of non-communicable diseases.
Active management and value creation
- Madison India Capital (“Madison”) was an existing investor in Star, and was part of the consortium to complete the buyout under the new lead shareholders.
- Madison worked with the management team and other shareholders to help Star navigate the COVID-19 crisis in India.
- Madison developed an ESG management system that integrates consideration of ESG risks into their investment processes. According to Madison’s annual ESG report, Star Health is one of the best-performing companies in their portfolio from an ESG perspective.
About the company
CoreLogic is a provider of information and outsourced services primarily to the mortgage, real estate, and insurance sectors. CoreLogic’s services can be divided into two key segments– underwriting services (representing 66% of revenues), and property intelligence & risk management (representing 34% of revenues).
Investment Rationale
- Owner of largest residential real estate data assets in the industry, with total records spanning nearly all residential land parcels in the USA.
- Proven M&A platform well placed to acquire a broad range of potential targets in the mortgage, real estate and insurance sectors.
- Highly diversified revenue base by concentration and end market.
Our relationship
PIP is a primary investor in seven Insight Partners (“Insight”) funds and has acquired secondary interests in several Insight funds. In addition, PIP has participated in seven co-investments alongside the manager.
Active management and value creation
- Insight has built a perspective on the industry over many years, having invested in its first insurance technology deal over 20 years ago.
- The private equity manager has built an impressive track record of investing in software companies with unique data assets, which it believes will help CoreLogic better utilise its robust datasets and reposition the business into higher-growth revenue segments.
- A dedicated team of 40+ M&A professionals at Insight is expected to be a key source of value creation.
About the company
Mobilitie develops and operates networks and infrastructure that wireless carriers rely upon to provide coverage for their customers. The company primarily focuses on installing indoor and outdoor distributed antenna systems (“DAS”) and Wi-Fi networks in venues with high footfall such as sports stadiums, convention centres, casinos, hospitals, shopping malls, hotels, college campuses and entertainment venues.
Investment Rationale
- Increasing network demand both in the number of wireless users and the data usage of wireless interactions.
- Proven management team with long-term relationships with all major wireless carriers.
- Long-term contracted revenue streams.
Our relationship
Pantheon has a well-established relationship with Shamrock Capital Advisors (“Shamrock”) dating back to 2012. PIP is a primary investor in two Shamrock funds and has participated in three co-investments alongside the manager.
Active management and value creation
During the investment period, the Mobilitie asset portfolio expanded to include:
- 118 DAS networks;
- 10 Wi-Fi networks; and
- 290 towers.
Additionally, in September 2020, Mobilitie signed a strategically important agreement with the San Francisco Bay Area Rapid Transit District, the nation’s fifth busiest public transportation system by ridership, to provide a complete DAS, Wi-Fi and fibre network services platform.
Exit
Mobilitie was acquired by BAI Communications in September 2021, providing a full exit for Shamrock and for PIP.