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Capital SCF advises HgCapital on its majority investment in IntelliFlo Limited

August 9, 2013

Capital SCF, the technology-focused independent corporate finance boutique, is pleased to announce that it advised HgCapital on its majority investment in IntelliFlo Limited.

The investment was the second made from HgCapital’s Mercury Fund. IntelliFlo is a leading SaaS (Software as a Service) provider of front and back office software to Financial Advisors, Advisor Networks and Brokers.

The transaction, for an undisclosed amount, has allowed for a transition in the ownership of IntelliFlo with the continuing senior management team retaining a significant interest in the business.

Commenting on the transaction, James Clark, Director of Capital SCF, said

“IntelliFlo is a leading European SaaS business with a strong market position in the UK, and is well-positioned for the industry shift post RDR. We are delighted that we were able to assist HgCapital in their majority investment in IntelliFlo. Working with the Hg Mercury team to a tight timescale and developing pragmatic solutions to a complex deal has been a pleasure and we look forward to Intelliflo’s continued success with its new shareholders.”

Sebastien Briens, Associate Director of HgCapital, said:

“The Capital SCF team has proved a close and excellent partner in the deal, with a strong mix of software sector experience, creative problem solving and speed of execution”.

About HgCapital

HgCapital is a sector-expert private equity investor, supporting management teams to grow industry champions within the mid-market. Deeply resourced sector teams focus on specific sub-sectors and investment themes to identify companies occupying an established position within a niche, and which have the potential to grow faster than their market, create employment and become the leader in their industry. HgCapital’s dedicated portfolio management team provides practical support to management. HgCapital invests in expanding segments of the Healthcare, Industrial, Services, TMT and Renewable Energy sectors across Western Europe. Based in London and Munich, HgCapital manages investments for some of the world’s leading institutional and private investors. For further details, please see www.hgcapital.com.

About Capital SCF

Capital SCF is a technology-focused independent corporate finance boutique headquartered in London. It provides high quality, independent advice to the senior management teams and boards of the European technology industry’s innovative incumbent and disruptor companies, and their investors on strategic matters critical to growth and success. Capital SCF’s directors combine a broad network of global relationships with deep sector knowledge and specialist M&A experience to deliver a superior, senior level of service for clients who value experience, judgment, insight and innovative thinking. In addition to mergers & acquisitions advice, Capital SCF leverages its team’s extensive corporate finance and capital markets experience to advise companies on capital structure and capital raising choices, selectively raising private capital for clients. For further details, please see www.capitalscf.com

For more information please contact James Clark or Rachel Clayton at Capital SCF on +44 20 7183 3212.

Capital SCF advises MindLeaders on its sale to Skillsoft

October 11, 2012

Capital SCF, the technology-focused independent corporate finance boutique, is pleased to announce the sale of its client ThirdForce Group Plc (nka: MindLeaders) to Skillsoft. Dublin, Ireland based MindLeaders is an international provider of SaaS-based e-learning and talent management solutions to corporations globally.

The acquisition will add to Skillsoft’s existing offerings in learning content, and supports the company’s overall strategy to continually increase the quality and flexibility of the learning solutions it makes available to its corporate, government, education, and small-to-medium size business customers. Further, the addition of MindLeaders’ capabilities will strengthen Skillsoft’s ability to expand its compliance-related business in the United States and United Kingdom. The combined entity will offer MindLeaders’ customers access to a much broader portfolio of products as well as a much richer variety of learning content types including videos, online books and rich media amongst others.

The transaction was structured as a general offer under Irish law and was unanimously recommended by the MindLeaders board of directors, pursuant to which shareholder acceptances in respect of approximately 91.3% of shares were received at first closing of the offer.

Brendan O’Sullivan, CEO of ThirdForce said:

Capital SCF’s insight into the market and understanding of the sale process were key to achieving the price premium for our shareholders. Reflecting on the transaction I can see that their dual focus on the big picture and the detail meant that they did an excellent job controlling the process and steering our team to a very successful result. I recommend Capital SCF as an excellent team to have on your side.

 

About MindLeaders

MindLeaders is a leading provider of e-learning technologies and blended learning and talent management solutions which drive organisational performance and develop talent in more than 2,500 organisations across thirty countries. MindLeaders have pioneered e-learning solutions since 1981, offering a fully integrated talent management and development solution featuring performance management, learning management and e-learning resources on one unified platform.

MindLeaders is headquartered in Dublin, Ireland, with offices in the US, UK, Australia and South Africa. For more information about the company and its services go to: www.mindleaders.com.

About Skillsoft

Skillsoft is a pioneer in the field of learning with a long history of innovation. Skillsoft provides cloud based learning solutions for its customers worldwide, ranging from global enterprises, government, and education to mid-sized and small businesses. Skillsoft’s customer support teams draw on a wealth of in-house experience and a comprehensive learning e-library to develop off-the-shelf and custom learning programs tailored to cost-effectively meet customer needs. Skillsoft’s courses, books and videos have been developed by industry leading learning experts to ensure that they maximize business skills, performance, and talent development.

Skillsoft currently serves over 5,000 customers and more than 13,000,000 learners around the world. Skillsoft is privately owned by Private Equity firms Advent International, Berkshire Partners and Bain Capital. For more information about the company and its services go to: www.skillsoft.com.

About Capital SCF

Capital SCF is a technology-focused independent corporate finance boutique headquartered in London.  It provides high quality, independent advice to the senior management teams and boards of the European technology industry’s innovative incumbent and disruptor companies on strategic matters critical to their growth and success.  Capital SCF’s directors combine a broad network of global relationships with deep sector knowledge and specialist M&A experience to deliver a superior, senior level of service for clients who value experience, judgment, insight and innovative thinking.  In addition to mergers & acquisitions advice, Capital SCF leverages its team’s extensive corporate finance and capital markets experience to advise companies on capital structure and capital raising choices, selectively raising private capital for clients.

Capital SCF advises Altran Technologies SA on the sale of its engineering services subsidiaries Hilson Moran UK and Hilson Moran Italia

April 2, 2012

Capital SCF, the technology-focused independent corporate finance boutique, is pleased to announce that is has advised Altran Technologies SA, the European leader in innovation and high-tech engineering consulting, on the disposals of its engineering services subsidiaries Hilson Moran UK and Hilson Moran Italia. Hilson Moran UK was sold to its management team in an MBO backed by Albion Ventures, an independent Venture Capital firm based in the UK. Hilson Moran Italia was acquired by Deerns Group BV, the Netherlands based international engineering consultancy firm.

These disposals are in accordance with Altran’s strategic plan announced on 19 October 2011 by Phillip Salle, Chairman and CEO of Altran, to exit non-core operations and refocus on innovation and information systems consulting, and enable Altran to reach a turning point in its development.

The MBO of Hilson Moran UK enables its directors to gain independence from the UK subsidiary of Altran Technologies (which acquired Hilson Moran back in 2002) and react to changing markets and evolving client needs.

With the acquisition of Hilson Moran Italia, a high-calibre Italian engineering consultancy, Deerns aims at further strengthening its position in the larger EU markets where it now has offices in six countries. It follows the recent opening of offices in Paris (2010) and London (2011), whilst the Group’s strongest presence is in The Netherlands and in Germany.

Nicolas De Smet, Head of Strategy and M&A, Altran Technologies SA, said:

Capital SCF brought to the transaction the competence of a large bank, the knowhow and understanding of technology experts and the flexibility of a responsive organisation. Capital SCF has assisted us on domestic and cross-border transactions, and on both accounts their understanding of our objectives greatly eased the negotiations and allowed us to extract the best value for our stakeholders.

About Altran

As the European leader in innovation and high‐tech engineering consulting, Altran accompanies its clients in the creation and development of their new products and services. Altran has been providing services for around thirty years to key players in the Aerospace, Automotive, Energy, Railways, Finance, Healthcare and Telecoms sectors. Covering every stage of project development from strategic planning through to manufacturing, Altran’s offers capitalise on the Group’s technological know‐how in four key areas: Product Lifecycle Management, Mechanical Engineering, Systems Engineering and Embedded Systems, and IT Systems.

With sales of €1,437m in 2010, Altran has a staff of more than 17,000 employees worldwide, including 15,000 consultants, and 500 major clients. For more information about the company and its services go to: www.altran.com.

About Hilson Moran UK

Hilson Moran provides consultancy in building services, sustainability, facilities management and other services and is firmly established as a leading engineering consultancy to commercial office, data centre, retail, leisure, hotel and residential projects such as “The Gherkin”, Wembley Arena and the Olympic Village at Stratford. The company employs more than 200 staff based in London, Manchester, Farnborough, Abu Dhabi and Qatar and achieved a growth in turnover of more than 20% last year. For more information about the company and its services go to: www.hilsonmoran.com.

About Albion Ventures

Albion Ventures is one of the largest independent venture capital investors in the UK, managing approximately £230 million across seven Venture Capital Trusts. It looks to invest £1-10 million in a wide range of growing businesses, from technology orientated companies to service and asset-based businesses. For more information about the company and its services go to: www.albion-ventures.co.uk.

About Deerns Group BV

Deerns Group BV is an international multi-disciplinary consulting engineering firm founded in 1928 to provide expert design services in the fields of Energy Supply, Sustainability, MEP systems and Master Planning. The privately held firm specialises in building services consultancy and engineering and sustainable building design. Its strongest presence is in The Netherlands and in Germany. Apart from its European activities, Deerns has offices in Dubai (UAE) and in Denver (USA). Its 500 professional staff serve clients worldwide in the airports, health care, data centres, clean technology, commercial and office real estate, and sustainable design markets. For more information about the company and its services go to: www.deerns.com.

About Capital SCF

Capital SCF is a technology-focused independent corporate finance boutique headquartered in London.  It provides high quality, independent advice to the senior management teams and boards of the European technology industry’s innovative incumbent and disruptor companies on strategic matters critical to their growth and success.  Capital SCF’s directors combine a broad network of global relationships with deep sector knowledge and specialist M&A experience to deliver a superior, senior level of service for clients who value experience, judgment, insight and innovative thinking.  In addition to mergers & acquisitions advice, Capital SCF leverages its team’s extensive corporate finance and capital markets experience to advise companies on capital structure and capital raising choices, selectively raising private capital for clients.

Capital SCF advises Twinfield on its sale to Wolters Kluwer

June 14, 2011

Capital SCF, the technology-focused independent corporate finance boutique, is pleased to announce the sale of its client Twinfield – Europe’s premier pure-play accounting software-as-a-service (SaaS) business – to Wolters Kluwer.

Dutch-based Twinfield is a leader in online, SaaS-based collaborative accounting solutions in Europe, serving professionals in the Netherlands, UK and Scandinavia. Through this acquisition, Wolters Kluwer expands and complements its existing offering of advanced software solutions for accountants and finance professionals in SMEs in all the western European markets it serves. Twinfield will become part of the European activities of Wolters Kluwer Tax & Accounting, the global market leader in tax, accounting and audit solutions and services.

James Clark, Director of Capital SCF said: “It has been a privilege to work with Twinfield on this transaction. André, Bert and the Twinfield team have built a compelling offering for SMEs and accounting firms. They are already the market leader in the Dutch market, and as part of Wolters Kluwer, they stand well positioned to compete in the broader European market. Capital SCF are strong advocates of cloud computing and software-as-a-service business models, and this transaction reaffirms the strategic importance of SaaS in the European technology landscape.”

About Twinfield

Twinfield is a European market leader in SaaS accounting. Over 80,000 financial accounts run on Twinfield across 22 countries. Twinfield ensures efficient, secure, real-time data exchange between clients and administration or accountancy firms. Because Twinfield works as a web application, users can access and exchange financial reports online anywhere and anytime via a secure internet connection. For more information about the company and its services go to: www.twinfield.co.uk

About Wolters Kluwer Tax & Accounting

Wolters Kluwer Tax & Accounting, a division of Wolters Kluwer, is the global leading provider of tax, accounting and audit information, software and services. Tax, accounting, and audit professionals who serve as trusted advisors to clients and businesses worldwide rely on authoritative content and integrated workflow solutions from global leader Wolters Kluwer Tax & Accounting.  Wolters Kluwer had 2010 annual revenues of €3.6 billion, employs approximately 19,000 people worldwide, and maintains operations across Europe, North America, Asia Pacific, and Latin America, serving customers globally. Wolters Kluwer is headquartered in Alphen aan den Rijn, the Netherlands. Its shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.

About Capital SCF

Capital SCF is a technology-focused independent corporate finance boutique headquartered in London.  It provides high quality, independent advice to the senior management teams and boards of the European technology industry’s innovative incumbent and disruptor companies on strategic matters critical to their growth and success.  Capital SCF’s directors combine a broad network of global relationships with deep sector knowledge and specialist M&A experience to deliver a superior, senior level of service for clients who value experience, judgment, insight and innovative thinking.  In addition to mergers & acquisitions advice, Capital SCF leverages its team’s extensive corporate finance and capital markets experience to advise companies on capital structure and capital raising choices, selectively raising private capital for clients.

Google debate: challenges for technology SMEs

March 18, 2011

Thanks to Google for hosting a great debate: “Do we [in the UK] need more dedicated policies to help SMEs or are the challenges they face the same as any small businesses?”

The overwhelming answer, and clearly the debate title leads in this direction, was yes, for a number of reasons, which I’ll come on to.

First off, though, it’s worth mentioning that hosting an event with quality participants in a forum at which all are encouraged to contribute (in this case over dinner with some alcohol to get things going, and under Chatham House Rules) beats the 2-dimensional panel-audience conference environment which plenty of us are familiar with (which conferences, more often than not, you pay lots of money to attend). Hearing a panel of experts marketing their expertise being harangued by audience members whose aim is to be heard asking smart questions doesn’t work. And even the pre-post coffee chat often doesn’t go anywhere. (Un-conferences are far better in my view because they represent an intellectual rather than a paying community. Roll on Cloudcamp.)

The debate scenario, which admittedly is partially controlled by the Chairperson and invited guest speakers (who speak for no more than 5 minutes or so to warm up the debate), draws forth participants’ passionately held views about real problems they, their businesses or the ecosystem in which they operate may be facing. Let’s have more of this type of event please.

Some observations (follow-ons) from the debate are as follows:

The Tier 1 (General) visa application is now closed to applications from abroad (non EU citizens). This means that highly skilled people, previously entitled to apply for work or self-employment opportunities in the UK, can no longer do so. There is of course the option for companies to sponsor skilled employees under Tier 2 (sponsorship fee of £300 for small sponsors or £1000 for large sponsors) if they can prove compliance with the resident labour market test, but the time, effort and required infrastructure it takes to arrange this is a significant obstacle to resource-constrained SMEs. Entrepreneurial early-stage businesses are often flexible and can simply move out of the UK if the operating environment becomes unmanageable. Those businesses that cannot for one reason or another relocate will either have to find the skills they need in the UK or through the sponsorship process (which is not always possible: limitations as to numbers of sponsorship licenses available), outsource (which is not always commercially sensible) or fail. This issue has become another barrier to raising capital for entrepreneurs who are not always British citizens and who must provide comfort to investors that they (and their employees) will be able to stay in the UK.

It’s worth noting that some recent rules, posted on UKBA on 16 March 2011, have come out on entrepreneurs visas stating that though “the standard investment threshold for an entrepreneur to qualify for a Tier 1 visa will remain at £200,000, [...] the government will allow high-potential businesses to come to the UK with £50,000 in funding from a reputable organisation” (at this stage I am not clear what “high potential” means), but perhaps more interestingly a new visa is being created for prospective entrepreneurs who will be allowed to enter the UK, make arrangements and secure funding before transferring to a full Tier 1 (Entrepreneur) visa. An encouraging move; watch this space!

Online infrastructure is poor in London for SMEs: we note this as a SME ourselves. It’s easy for the enterprises which benefit from the scale possibilities of procuring high-end fat pipes to provide connectivity to many employees. For individuals, broadband works just fine. For SMEs (e.g. us) it can take several months to get proper connectivity. For us, moving into new offices, it took around 2 months for our BT EFM connection to become live and in terms of price-performance, the equation doesn’t stack up. Given that our business is run almost entirely using online services (see our blog on Startup Infrastructure), until our connection became stable, it made very little sense coming into the office. We think landlords ought to have some responsibility to provide connectivity as part of a standard services agreement.

Tax: The punitive UK tax environment makes it difficult to incentivise people to work in the UK. It’s not all bad. We approve of Entrepreneurs’ relief, for instance, though the legislation, it appears, could do with some tidying up around who qualifies for this and why.

Education: How to code should be taught in schools instead of (say) F***** or G********. We need to make coding cool and to encourage kids to build technical skills in a hobby environment. Maybe an app to introduce code-building is required; it could be made into a game.

The legislative environment (Digital Economy Act) has sought to protect outdated business models. Powerful lobbying from enterprises used to generating core revenues through selling content has contributed to this. However attitudes are changing with the advent of access-based revenue models which provide streamed content online. The access-based model has been adopted in China and India (where content has always been pirated) and works effectively. In countries where the technology environment is more developed, we need to see a paradigm shift from the sale of content towards providing access to content and generating revenues through this from advertising, subscriptions to online services and selling user data. The DE Act by criminalising file-sharing is pushing against the tide of the consumer market place and hampering collaborative innovation where it is needed i.e. investing in service-based models to enhance user experience. And, of course, all this ties back with the earlier point in relation to online infrastructure – for instance, as the access-based model continues to prevail (which will continue to happen in spite of the DE Act) and video and radio over IP increases in quality and bandwidth, the network will need significant beefing up to cope.

Some feedback from our SME clients

IP law creates a barrier to entry: It’s complex and expensive for SMEs to file patents and the protection they provide is only as useful as a company’s ability to pay its lawyers to protect them. Conversely patents are often used by the enterprise to quash new technologies either through acquisition (big companies buying patents to eliminate disruptive technologies) or through litigation (big companies putting SMEs out of business because they don’t have the cash to fight expensive legal battles).

Contract law versus copyright law: Copyright law is frequently overridden by what’s written in contracts between licensors’ and licensees’ of tech / content / services. I think the SME-related instance of this with which we are all most familiar would be the resale of software licenses, allowed by copyright (and the principal of first sale), but often forbidden by license agreements.

Procurement issues: It’s made difficult for SMEs to win large public or private tenders. Some of the gate-factors to winning such contracts are: “you have no insurance”, “we need 3 years accounts”, and “you might go bust”. I think we need to incentivise the enterprise to open up corporate policies to encourage SMEs to compete for large contracts. After all a disruptive SME has a much greater chance of delivering significantly cheaper services. We should be encouraging this!

Funding environment: British investors’ attitudes to equity-funding start-ups can be circumspect. We have had some great ideas come across our desk for which the UK market appears closed (so we go elsewhere). These are innovative disruptive business models that exhibit stellar growth prospects and with strong management teams. What’s not to love! The truth is pre-revenue has been a hard-sell of late, but we think this is changing.

Conclusion

The regulatory environment needs to be flexible to the global market-place and to encourage early adoption of new technologies. If we want to encourage entrepreneurship in the UK we need to protect SMEs against onslaught from the enterprise and to foster a culture of innovation through our legislative framework, our education system and in our working lives.

Further reading:

Graham Barker & Peter Bissell, A Better Mousetrap: the business of invention

The Coalition For a Digital Economy

Independent Review of IP and Growth

Capital SCF advises Focus Solutions in its sale to Standard Life for £48 million

January 11, 2011

Capital SCF, the technology-focused independent corporate finance boutique is delighted to announce the successful conclusion of the sale of its corporate client, Focus Solutions Group plc to Standard Life Plc for a gross consideration of £48 million.

The offer, which was unanimously recommended by the Board, valued the ordinary shares of the Focus Solutions at 140p each and represented a premium of 33.3% to the closing price of Focus Solutions shares on the last business day prior to the announcement of discussions.

Commenting on the closing of the transaction, James Clark, Director of Capital SCF said “It has been a pleasure working with the Board of Directors of Focus on this transaction and we are delighted at the result – both in terms of the value realised by shareholders, and also the strategic opportunities for Focus and its employees within the Standard Life fold.”

Richard Stevenson, CEO of Focus Solutions said: “Capital SCF’s deep sector knowledge, coupled with outstanding technical execution skills, was instrumental in our ability to deliver an excellent result for shareholders in the sale of Focus Solutions.  We were delighted and impressed by the focus and diligence that they brought to the project and would have no hesitation in using them again or recommending them to others.”

 

About Focus Solutions

About Standard Life

About Capital SCF

The Cloud Security Paradox

January 7, 2011
  1. Enterprises can’t/won’t adopt cloud because of the security.
  2. Enterprises are moving their security to the cloud.

These two statements would seem to be opposing, but they’re both true – and there lies the paradox.

When the conversation is about ‘as a Service’ such as IaaS, PaaS and SaaS then in most cases the first statement applies. You don’t have to look very far to find security at the top of everybody’s list about why they’re not doing cloud. This is understandable. Moving stuff to the cloud involves transitional risks (bad stuff happening when you change things) and outsourcing risks (other people’s screwups getting you fired), and risk=~security right?

When the conversation is about Managed Security Service Providers (MSSPs) then the second statement applies. The whole point of MSSPs is that they can bring to bear on the thorny problem of security monitoring systems and expertise that no single organisation could do for themselves. There was a whole session at WEIS 2007, chaired by Bruce Schneier, looking at the role of MSSPs in the overall security ecosystem(/economy).  MSSPs are used by some of the largest and most conservative firms on the planet (like Swiss Banks) – exactly the kind of organisations that say they’d have a hard time adopting ‘cloud’.

“Ah”, I hear you say, “MSSPs aren’t ‘cloud’ in the same way that IaaS, PaaS and SaaS are ‘cloud’” – at which point we need to define ‘cloud’. My definition of cloud (which I steal shamelessly from Simon Wardley[1]) is that it is the use of IT as a standardised commodity sold as a utility. This definition clearly works for MSSPs and for *aaS.

What I find odd is the expectation that an MSSP view of cloud (statement 2) can somehow influence a ‘security stops me from *aaS’ view of cloud (statement 1). Here are some of the headlines that set off this cognitive dissonance (coming from this week’s announcement that Dell will buy MSSP SecureWorks):

and others are clearly feeling that dissonance, and think that the deal is actually all about pushing back against the threat of ‘cloud’:

I don’t think either are a true view. Dell buying an MSSP is unlikely to move many of their customers towards cloud (if they’re digging in against ‘security’ concerns) or away from cloud (if they are enlightened enough to realise that cloud services can meet their security needs).

The heart of the cloud paradox is that large scale service providers can do things with security that their smaller scale customers cannot – something that was covered brilliantly by David Molnar and Stuart Schechter in their paper presented at WEIS 2010. So *aaS style cloud brings the same sort of security benefits as an MSSP style cloud (and both bring their own risks). The paradox will be resolved when more people realise this.

[1] and Simon would likely say that his definition actual comes from Douglas Parkhill and others.

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