Not everything in business can be planned for in advance, but firms must always be ready to move quickly and decisively should circumstances change – for the better or the worse. Foresight Group’s investment in, and Matrix Private Equity Partners’ subsequent support of, Camwood – an IT consulting business based in the UK – demonstrates how private equity is able to do just this, acting opportunistically to take advantage of a changing landscape.
When it emerged that an in-house software tool at Camwood had a potentially huge external market, the two private equity firms were ready to help a new business, App-DNA, launch itself into the outside world, and provided the support and professionalism it needed in those early, high-growth years.
Foresight and Matrix provided App-DNA with not only finance, but also the professional support and advice to develop the business.
Patrick De Smedt Chairman, App-DNA
What did the business need?
- Initial investment in Camwood, providing the IT consulting business with development capital for growth
- Management improvement
- International expansion
How did private equity backing create lasting value?
- Helped to identify internal software tool as having commercial potential
- Developed business plan for App-DNA, setting benchmarks and KPIs
- Provided flexible financing structure to cover start-up costs
- Built team, installed best-practice structures and build management function
- Introduced networks to add value and build skills
- Brought in top management including the ex-Chairman of Microsoft Europe
What outcomes did private equity investment achieve?
- Grew from half a dozen to 80 staff in three years
- Now present in the US, Australia and France, with sales across the globe
- Sale to Citrix for $95m consideration achieved a 32x return and an IRR of around 240% for investors, with App-DNA still growing strongly
- Retains stake in Camwood – still performing strongly, with staff numbers up from 25 to 70 during investment period