About the company
HyTest is a Finnish company that develops and manufactures monoclonal antibodies and antigens for the diagnostic industry and research communities. Monoclonal antibodies bring T cells close to cancer cells, helping the immune cells kill the cancer cells. 90% of revenue comes from in vitro diagnosis (“IVD”) reagent (testing kit) customers, and 10% comes from research organisations (e.g. academic institutions). HyTest’s largest markets are Asia (primarily China), the USA and Europe.
Investment Rationale
- Non-cyclical growth sector and attractive business model with “mission-critical” products, sticky customer relationships and high cash flow conversion.
- The company has a strong competitive positioning and has grown faster than the market.
- Scientific background of the founder and senior management team members lay the foundation of HyTest’s technical capability and superior product offering.
- In the midst of the global pandemic, testing for critical conditions has become increasingly important and HyTest has helped meet the increased global demand for high-quality antibodies and antigens, which are key components in various laboratory tests and diagnostic kits.
Our relationship
Pantheon has a long-standing relationship with Summa Equity (“Summa”), having been a founding investor in its first fund, and has supported all their funds since then. Pantheon is also an advisory board member and has completed two co-investments alongside Summa.
Active management and value creation
- Summa has added value by professionalising the business, increasing salesforce depth, new customer introductions in the high growth diagnostic categories which are additive to HyTest’s existing portfolio.
- The Summa partner leading this investment had significant experience in the IVD sector, having completed two deals in this space.
- Over the holding period, Summa was able to accelerate research and development and launch new products.
Exit
HyTest was acquired by Chinese medical device company Mindray Medical International in November 2021, providing a full exit for Summa and for PIP.
About the company
McGraw-Hill Education (“MHE”) is a leading global provider of education materials and learning solutions for students in the university K-12 and professional learning markets. The company’s products include print and digital textbooks, digital learning solutions, and customised education products.
Investment Rationale
- Primary buyout effects and potential cost savings, as a result of carving out MHE from McGraw-Hill Companies to form a standalone business.
- MHE had invested heavily to position itself with a competitive advantage in digital solutions, a high growth market.
- Strong free cash flow profile as the company benefited from positive working capital and modest capex requirements.
- Opportunity for consolidation with one of the other major players in the education industry, Cengage.
Our relationship
PIP is a primary investor in two Apollo Management (“Apollo”) funds and has acquired a secondary interest in an Apollo fund. In addition, PIP has participated in five co-investments alongside the manager. Pantheon also holds three advisory board seats with the manager.
Active management and value creation
- Significant further investment in digital products.
- Completion and integration of six digital-focused acquisitions.
- Turnaround of MHE’s K-12 and International businesses .
- Implementation of cost-saving actions.
Exit
MHE was acquired by Platinum Equity in August 2021, providing a full exit for Apollo and for PIP.
About the company
CIPHR is a UK-based provider of cloud/Software-as-a-service human capital management (“HCM”) and payroll solutions to mainly mid-market businesses. The company offers a suite of proprietary software and software from its partner network (known as ‘CIPHR Connect’), serving mainly UK customers, with several of its customers using its software in multiple geographies. CIPHR’s partner network allows greater module customisation for specific customer types.
Investment Rationale
- An attractive business model with demand driven by heightened regulation; CIPHR’s core UK HCM software market is expected to grow quickly in the next few years.
- The company operates a subscription model with a majority of recurring revenues and limited customer churn.
- CIPHR operates joint selling arrangements with partners who offer a captive pool of potential M&A targets in a fragmented market.
- ECI expects interest from a wide range of private equity and trade buyers at exit.
Our relationship
PIP is a primary investor in four ECI Partners (“ECI”) funds and Pantheon holds an advisory board seat on each fund.
Active management and value creation
- ECI was the preferred bidder for CIPHR, which the private equity manager highlights as evidence of its good relationship with the founding CEO and wider management team.
- Expansion through M&A is a core value creation strategy for ECI.
About the company
RAYUS (formerly known as CDI) is a leading provider of high-quality diagnostic imaging and interventional radiology. The company operates through a network of imaging centres, ambulatory surgery centres and mobile imaging solutions.
Investment Rationale
- The diagnostic imaging industry has experienced a payer-driven shift in scan volume to non-hospital image centres which typically cost three to five times less than hospital options.
- RAYUS has a strong M&A track record and is well positioned to take advantage of a large consolidation opportunity within the US diagnostic imaging market, which comprises of over 6,500 imaging locations and where most competitors are small operators with only one to five centres.
- The company achieved a quick recovery after the COVID-19 lockdowns as volumes were largely deferred rather than lost altogether.
Our relationship
- Pantheon has a well-established relationship with Wellspring Capital Management (“Wellspring”), dating back to 2008.
- PIP is a primary investor with Wellspring and has completed two co-investments alongside the manager.
Active management and value creation
- Healthcare is one of Wellspring’s core investment verticals and the private equity manager has built an attractive track record in the space.
- Wellspring plans to continue executing the M&A strategy that it has successfully employed since investment.
- The manager will pursue new strategic growth opportunities in existing geographies to continue to build leverage with regional payers.
About the company
- Leading distributor of mobile and industrial filters for after-market applications.
- SF Filter’s modern filtration technology contributes to a cleaner environment by reducing energy consumption and the emission of pollutants.
Why invest
- Resilient business model operating in a favourable regulatory environment.
- Opportunity to accelerate organic growth through the reorganisation of its sales force, the introduction of CRM tools and by strengthening the management team.
- Potential to acquire industrial clients through complementary add-on acquisitions.
- Ambienta’s strong focus on operational improvement and internationalisation has resulted in the strengthening of the company’s organisation and systems, the optimisation of the balance sheet and the fuelling of online sales.
Our relationship
- Pantheon is a primary investor and holds Advisory Board seats in two Ambienta funds.
Manager ESG credentials
- Ambienta is a leading European manager that invests exclusively in companies whose products or services generate resource efficiency or control the impact of pollution.
- Ambienta has developed a proprietary scoring system to reflect their sustainability-driven private equity investment approach. In addition, Ambienta applies a range of standardised metrics to capture the full environmental impact of their portfolio companies.
- Ambienta achieved the Climate-Neutral label in 2020 and is committed to addressing incremental emissions that may arise from the expansion of the firm’s reach and operations.
- Ambienta’s diversity strategy continues to be implemented extensively and has been embraced at the highest levels of the organisation. In 2020, 44% of new hires were female.
- Ambienta’s longstanding commitment to sustainability and ESG has been recognised by the industry.
About the company
Imperfect Foods was founded in 2015 with a mission to eliminate food waste and build a better food system for everyone. The company offers imperfect (yet delicious) produce, affordable pantry items, and quality eggs and dairy, delivering conveniently and safely to customers’ doorsteps. Imperfect Foods prides itself on offering affordable groceries, so customers can get the healthy, seasonal produce they want alongside the grocery staples they rely on, without having to compromise their budget or values.
Why invest in the company
The nearly one trillion dollar US grocery market is moving online rapidly, further accelerated by the COVID-19 pandemic that caused an immediate inflection point in adoption. The emerging “ugly produce” grocery category offers a differentiated and recession-resistant value proposition, marrying the brand ethos of sustainability with greater convenience and freshness at low prices. Insight Partners (“Insight”) identified Imperfect Foods as an early mover in this category, highly advantaged by its purpose-built value chain with high barriers to entry. Through Insight’s due diligence, the manager identified further potential opportunity to deepen the company’s defensibility and expand margins through continuous improvement across the value chain, including enhancements in automation, analytics, and customisation.
Our relationship
Pantheon’s relationship with Insight Partners dates back to 2005. Pantheon has invested in eight Insight funds and has completed five co-investments alongside the manager.
ESG approach
Imperfect Foods was founded to fight food waste by finding a home for the imperfect or “ugly” fruits and vegetables that farms could not sell to grocery stores. Imperfect Foods demonstrates a strong commitment to ESG causes both through its mission of environmental sustainability as well as through its commitment to its employees and the community more broadly:
- Imperfect Foods helps save food from waste, thereby avoiding emissions to produce food that is ultimately wasted, which currently account for 25% of the food system’s greenhouse gas emissions. In 2020, the company saved over 50 million pounds of food, avoiding over 20,000 tonnes of carbon dioxide emissions.
- Imperfect Foods’ last mile delivery network efficiently batches together customers and neighbourhoods, emitting approximately 12,800 tonnes less of carbon dioxide than if each customer went to the grocery store themselves, or the equivalent of taking 2,800 cars off the road for one year.
- Imperfect Foods’ Reduced Cost Box programme provides a discount on food orders to qualifying low-income customers. The programme more than tripled in size in 2020 due to increased need caused by the COVID-19 pandemic. The company fulfilled over 282,000 orders of Reduced Cost Boxes, serving nearly 13,000 customers.
- Imperfect Foods has made a number of commitments supporting diversity, equity, and inclusion (“DE&I”) within its workplace and more broadly. The company established three employee resource groups in 2020 – Black Imperfectionists Group, Imperfeminists, and Imperfectly Out. The company also launched an Anti-Racist Pledge to support black communities, improve internal practices, and promote racial justice. Progress in 2020 includes establishing a DE&I board, investing in DE&I software for recruiting to minimise implicit bias, and hiring a talent manager with a DE&I background.
Manager overview
- INCE Capital was founded in 2019 by JP Gan, the former Managing Partner and Head of Consumer Internet for Qiming Venture Partners.
- JP Gan is a renowned venture capitalist in China and has been featured in Forbes’ Midas List of top 100 global venture capitalists.
Pantheon ESG credentials
- Pantheon has a strong relationship with INCE Capital and was one of the first investors to commit to the manager’s first fund.
- Pantheon is a member of INCE Capital’s Limited Partner Advisory Committee.
- JP Gan established INCE with a small team with limited resources. Pantheon provided substantial knowledge transfer to INCE and, among other things, assisted in the institutionalisation of the manager’s ESG policies.
- With Pantheon’s assistance, INCE was able to adopt ESG best-practices within a short period after its formation.
- Pantheon assisted INCE in its development of a formal ESG policy.
- Pantheon provided climate change training to INCE, and recommended the incorporation of climate change considerations into its ESG policy.
- INCE formulated a Diversity & Inclusion statement with Pantheon’s support.
- Pantheon advised INCE on its anti-bribery & anti-corruption policy, business continuity plan, cybersecurity policy, and matters relating to fund liability insurance.
About the company
Sandaya is a premium outdoor leisure and hospitality group with 29 four and five-star campgrounds in France, Belgium and Spain.
Why invest
Sandaya was already a successful business when Apax Partners SA invested in the company, with full control over the value chain (land, operations, marketing). Apax Partners SA identified an opportunity to further enhance Sandaya’s operations and profitability through digitalisation, and to use Sandaya as a platform for consolidating the highly fragmented campsite market in Europe.
Our relationship
Pantheon has a long-standing relationship with Apax Partners SA dating back to the early 2000s and has completed multiple co-investments alongside the manager. Pantheon sits on the advisory boards of three Apax Partners SA funds.
Active management and value creation
Apax Partners SA monitored Sandaya for three years prior to investing in the company. Having developed a close relationship with its Founder & CEO over the years, Apax Partners SA was able to run an efficient due diligence process and submit a bid two weeks prior to the deadline.
Under Apax Partners SA ownership, the company:
- Acquired 21 additional campsites.
- Increased digital sales to 70% (vs. 30% at entry) by strengthening Sandaya’s digital marketing capabilities and the relaunch of its website.
- Increased international customer sales by 315% through distribution partnerships and branding campaigns in the Netherlands, Germany and the UK.
- Showed strong resilience during the COVID-19 crisis, significantly outperforming its peers in 2020 with a limited 10% decrease in like-for-like revenues (vs. 20% for the sector).
Exit
Sandaya was acquired by InfraVia Capital Partners in March 2021.
About the company
Signature Foods (formerly Salad Signature) is a leading branded and private label food franchise offering chilled and packaged spreads, dips, bites, tapas, and ready meal solutions. The company has a strong presence in the Benelux region and a rapidly growing European footprint across Poland, France, the UK, Germany and the Nordics. Headquartered in the Netherlands, Signature Foods employs over 600 people across seven manufacturing sites in the Netherlands, Belgium, and Poland.
Why invest
As the leading branded staple food provider in the Benelux region, Signature Foods was well positioned to tap into the growing addressable market for dips and salads. Together, the management of Signature Foods and IK Investment Partners (“IK”), identified a number of near-term acquisitions opportunities to expand Signature Foods’ product offering and generate operational synergies.
Our relationship
Pantheon has an established relationship with IK, dating back to the early 2000s. Pantheon is a primary investor in eight IK funds and has also acquired secondary interests in several IK funds. In addition, Pantheon has participated in a number of co-investments alongside the manager. Pantheon is an Advisory Board member in six IK funds.
Active management and value creation
During IK’s ownership, Signature Foods doubled in size on the back of robust organic growth and a dynamic buy-and-build strategy. IK, together with the management team, developed the company through the following value creation initiatives:
- Expanded into adjacent product categories by capitalising on the strength of its branded and private label products in order to continue the company’s successful track record of above-market organic growth.
- Completed four add-on acquisitions to gain access to the faster growing dips and bites market in the Benelux region and to create a footprint in the attractive Polish market.
- Achieved cost savings, following investment programmes at two major production sites.
Exit
Signature Foods was acquired by Pamplona Capital Management in December 2020.
About the company
ZeniMax is a leading independent developer, publisher and distributor of video games and other interactive content for consoles, personal computers, handheld and mobile devices.
Why invest
- High growth market driven by technological proliferation and increased consumer spending on gaming products.
- Existing portfolio of critically acclaimed, commercially successful gaming franchises.
- Experienced and innovative team with a long history of creating and selling premium video game titles to a worldwide market.
- Acquisition platform to consolidate a fragmented market.
