2015 Bridgepoint Annual Review
Transcription
2015 Bridgepoint Annual Review
2015 Bridgepoint Annual Review 1 contents Jonathan Zhou Partner, Shanghai 2 Bridgepoint Annual Review 2015 introduction 3Introduction 4 Discover Bridgepoint 8 New investments 24 Managing Partner’s overview 34 Investment and sector expertise 72 Current investments 74 Investing responsibly 82 Bridgepoint Charitable Trust 86 Our offices A long-established and experienced investor For over 25 years we’ve partnered with management teams across Europe to build great companies. Using local insight, expertise and resource, we invest in high-performing, wellmanaged businesses with the potential to grow through expansion, operational transformation or via acquisition. Our aim is to build stronger, broaderbased businesses with greatly enhanced long-term growth potential. Guided by a clear set of values that set out the expectations of the Firm about how we do business and underscore the duty to invest responsibly, our aim is to achieve high quality returns for our investors, colleagues, portfolio companies and their employees. These values are shared across our Firm and are fundamental to our professional and personal conduct. We believe they define us and help us maintain the highest levels of corporate governance and apply high standards of professionalism uniformly across Bridgepoint. Bridgepoint Annual Review 2015 Performancedriven one Thoughtful Bridgepoint Straightforward 3 Performance-driven We settle for nothing less than superior performance achieved by entrepreneurship, initiative, intelligent judgement and teamwork Thoughtful We always seek to make a difference – for investors, companies or in our duty as a responsible investor within the broader community Straightforward We are straightforward, open professionals who act without arrogance and embrace the views of others without prejudice Discover Bridgepoint Discover Bridgepoint Discover Bridgepoint Our locations Bridgepoint has been investing in Europe, and specifically in middle market businesses, for over 25 years. It is a place we know and understand. The Firm has been able to do so successfully thanks to its people, its network and relationships across the region. These have generated an exceptionally deep and broad flow of high quality investment opportunities as well as compelling returns for our investors, allowing us in turn to become one of the leading private equity investors in Europe. We have a local presence in every major European private equity market. With a network of eight European bases and a portfolio office in Shanghai, we can deploy resources effectively when identifying and completing transactions as well as manage value creation in the businesses we support. 01Frankfurt 02Istanbul 03London 04Luxembourg 05Madrid 06Paris 07Shanghai 08Stockholm 09Warsaw 8 In numbers 3 6 4 1 5 4 9 2 7 €12.7bn €9.1bn funds under management €25.7bn €20.5bn total value of transactions from €10.4bn invested since 2000 of committed capital raised to date 90,000 320 over 90,000 people currently employed by Bridgepoint portfolio companies Bridgepoint Annual Review 2015 5 returned to investors in last 10 years add-on acquisitions made by Bridgepoint companies in last 10 years Investors by location Over 250 investors from over 30 countries in Bridgepoint funds 58% Americas 36% 2% European Middle East 4% Australasia Investors by type Bridgepoint has a blue chip investor base comprising of public and private pension funds, asset managers, family offices, sovereign authorities and insurance companies around the world Bridgepoint Annual Review 2015 Pension funds 58% Asset manager Fund of funds 2% 10% Bridgepoint2% Insurance11% Bank2% Sovereign wealth fund Family office 8% Endowment6% 1% Discover Bridgepoint Discover Bridgepoint Through its portfolio... Business Services €1.7 billion invested in 15 companies in the European Business Services sector in the last 10 years. €1bn €1.7bn €1.4bn 6 Manufacturing & Industrials €1 billion invested in seven companies in the European Manufacturing & Industrials sector in the last 10 years. Portfolio growth in 2015 9% 14% Revenue Ian Dougan Managing Director, Operational Support Group Media & Technology €1.5 billion invested in 10 companies in European Media & Technology sector in the last 10 years. €1.5bn €1.9bn Healthcare €1.4 billion invested in 10 companies in the European Healthcare sector in the last 10 years. €500m 7 Consumer €1.9 billion invested in 14 companies in Consumer sector in the last 10 years. Financial Services €500 million invested in four companies in the European Financial Services sector in the last 10 years. EBITDA Bridgepoint Annual Review 2015 Bridgepoint Annual Review 2015 New investments New investments Bright futures Identifying value In 2015 we invested €950m in seven new businesses with a total enterprise value of €2.4bn. Bridgepoint-owned businesses made 42 additional acquisitions in the year as they pursued consolidation and internationalisation strategies. 8 Exceeding targets Bridgepoint investments returned over €1.8bn of capital to investors with seven major exits. Bridgepoint Annual Review 2015 Business growth Fund investments collectively generated 9% and 14% yearon-year average revenue EBITDA growth. Investments made in 2015 In 2015 Europe continued to provide a high quality range of growth-focused middle market businesses. Bridgepoint’s broad investment and operational resources were strongly positioned to exploit the opportunities provided in Europe as the home of numerous world-leading domestic and exporting enterprises. Our focus on six sectors brings us an in depth understanding of market trends as well as extensive industrial networks and relationships. In certain cases it can also generate investment opportunities outside intermediated processes as well as the market knowledge to accelerate growth in current portfolio companies. In 2015 we sought out sectors with strong underlying structural growth drivers growing well ahead of the broader economy or where Europe has global competitive advantage. Similarly, businesses with high visibility of earnings and contracted income that were overt beneficiaries of economic recovery were on our radar. We also have a long-standing track record of acquiring sector leaders operating in fragmented markets and using them as platforms for consolidation at accretive valuations. Generating ‘internal growth’ through operational improvement was also an important driver of earnings growth. We are well resourced to deliver farreaching business transformation thanks to an extensive team including an Operational Support Group, Portfolio Development Office in Shanghai and a Procurement Team that is unique within European middle market private equity. “Broad investment and operational resources were strongly positioned to exploit the opportunities provided by Europe as the home of numerous worldleading domestic and exporting enterprises.” Guy Weldon Partner and Chief Investment Officer Bridgepoint Annual Review 2015 9 New investments New investments Anaveo 10 Anaveo is a French provider of electronic security solutions such as video surveillance, security access control and intrusion detection to small and medium sized businesses. Established in 1995 and headquartered in Lyon, it has installed its security systems at over 8,000 sites across France for a predominantly retail client base of mostly independent retailers, as well as larger integrated chains. It has a network of 11 agencies and 270 employees across France and in 2011 opened a subsidiary in China to set up a direct sourcing strategy and establish a commercial presence there. The company designs its leading products using an in-house research and development team, managing new product development and the group’s proprietary software solutions. The French video surveillance market has demonstrated resilient historic growth and is forecast to expand at 5% p.a. based on continued penetration of video surveillance systems, upgrades to latest technology solutions and a growing replacement market reflecting the progressive shift within its target installed base from analogue to IP systems. With Anaveo’s recent product launches comes the potential to sell into the larger, adjacent €2bn access control market. Anaveo’s market is highly fragmented with over 40% of the segment comprised of smaller independent players providing the opportunity to accelerate growth via add-on acquisitions. In addition, expansion into new end-markets and the upselling of new product technologies in access control and anti-intrusion systems are also planned. This investment was made by BDC, the Bridgepoint fund that invests in small and mid-cap companies. “Anaveo’s differentiated expertise, product reliability and ease of use have enabled it to outperform the market.” Olivier Nemsguern Partner, Bridgepoint Development Capital Not disclosed Transaction size €43.7m Revenue 270 Employees Sector Business Services Location France Directors Grégory Louis Fabrice Tisseur Bridgepoint representatives Bertrand Demesse Olivier Nemsguern Website www.anaveo.com 11 New investments New investments Appleby Fiduciary & Administration 12 Appleby Fiduciary & Administration (‘AFB’) provides Trust & Corporate Services to a wide range of clients in nine jurisdictions around the world. Clients range from large global corporations from all sectors, to high net worth individuals, families and fund managers, including private equity, hedge funds, real estate and other alternative fund structures. AFB has three key business lines administering over 10,000 structures for almost 6,000 clients: Corporate Administration which provides incorporation and domiciliation services, Trust Administration which establishes trust structures and then provides day-to-day administration services, and Fund Services, which assists in the launch, incorporation and administration of funds. The company operates in a market benefitting from long-term structural drivers such as increased regulation, outsourcing and globalisation, all of which lead to underlying annual market growth of 7% globally. In addition, it is a fragmented market with a large range of small, sub-scale players. There is therefore a clear opportunity for AFB to acquire competitors of various sizes, ranging from individual books of business to larger transformational, multi-jurisdiction or multiservice line businesses. Over time this will allow AFB to consider diversifying by product and geography. Not disclosed Transaction size $84.6m Revenue 350 Employees Sector Financial Services Location United Kingdom Directors Farah Ballands Scott Carter Roger Siddle Bridgepoint representatives William Paul Emma Watford Website www.applebyglobal.com “Appleby brings significant opportunity to accelerate its growth organically and via acquisition in what remains a strongly growing market.” William Paul Partner, Head of Financial Services sector 13 New investments New investments Balt 14 Balt is a leading French medtech business in the fast-growing neurovascular market. Founded in 1977, it specialises in the design, manufacture and distribution of neurovascular devices and products that treat complex, life-threatening conditions of the brain, specifically strokes, aneurysms and arteriovenous malformations (AVMs). The company employs 90 people at its facilities in Montmorency (France) and Gland (Switzerland). The business focuses on so-called interventional neuroendovascular radiology (or INR) therapy, involving minimally invasive techniques, as opposed to traditional ‘open’ surgery, to correct and stabilise these damaging conditions. Successful intervention using INR techniques leads to substantially improved post-operative outcomes when compared to traditional surgeries and significant reductions in the levels of costly after-care required. INR devices include access and support (catheters, guidewires), embolisation (coils, stents, embolic liquid) and thrombectomy devices (stent retrievers). Balt serves French hospitals directly and has an international network of over 100 distributors covering Europe and beyond. Volumes of INR devices, currently estimated to be worth €1bn, are expected to grow at double digit rates as the number of patients diagnosed with and treated for neurovascular problems using INR techniques grows, on the back of an ageing population and increased rates of obesity. Not disclosed Transaction size €40m Revenue 90 Employees Sector Healthcare Location France Directors Hervé Novelli Nicolas Plowiecki Marina Plowiecki Stéphane Regnault Oern Stuge Bridgepoint representatives Vincent-Gaël Baudet Frédéric Pescatori Website www.balt.fr “Balt will be able to accelerate its growth, add further production capacity, enlarge its distribution network and attract new customers, while maintaining its innovative edge.” Vincent-Gaël Baudet Partner, Paris 15 New investments New investments The Dining Club Group 16 The Dining Club Group is the UK’s largest discount diners’ club with over four million members. It works with some of the country’s most popular restaurant chains, as well as over 6,000 independent restaurants. It operates two branded membership cards, tastecard and the Gourmet Society, and offers a compelling proposition for consumers thanks to the size of its restaurant network and level and consistency of discount. The company sells memberships through three channels: direct to consumers, to consumers via company employee benefit schemes, and to corporates who offer their customers memberships as part of a bundled offering, such as a premium bank account. Over the year a Dining Club member is able to make considerable savings on eating out, with only two to three uses of the card typically paying back the initial outlay for membership. In parallel, participating restaurants gain profitable incremental footfall. Total UK consumer spend on eating out was £78 billion in 2014. Regular diners eat out on average 34 times a year; discount card members by contrast eat out 45 times a year. With discounted dining now an established feature of the growing eating out market, the sector is now being increasingly driven by the technology needs of the consumer. The company will therefore extend its technological capabilities and broaden its geographical coverage to consolidate its already significant share of the UK discount dining club market. This investment was made by BDC, the Bridgepoint fund that invests in small and mid-cap companies. “With our support we are confident that the Group will grow its member and restaurant numbers, broaden its geographic coverage and extend its technological capability.” Alan Payne Partner, Bridgepoint Development Capital Not disclosed Transaction size £17.5m Revenue 102 Employees Sector Consumer Location United Kingdom Directors Annette Court Dave Cuckney Ben Eaton Sam Shaw Matt Turner Bridgepoint representatives Matt Legg Alan Payne Kevin Reynolds Websites www.tastecard.co.uk www.gourmetsociety.co.uk 17 New investments New investments Element Materials Technology 18 Element Materials Technology is a global leader in materials and product qualification testing for the aerospace, oil & gas and transportation markets – all of which require technical testing services with mission-critical applications. The company began life as the in-house laboratories testing business of a European aerospace and defence business but today it has 53 laboratories in Europe, the US and China, over 1,800 employees and 10,000 customers worldwide. It focuses on two core activities: Materials Testing, which involves the testing in one of its certified laboratories of a material, product or welded joint, often placing it under extreme pressure and heat; and Production Qualification Testing, which is typically carried out before a product or component goes into production so that it can be certified and pass the appropriate quality assurance tests. The Testing, Inspection and Certification market is growing strongly on the back of increasing regulatory and complexity requirements. In addition, long-term outsourcing trends and the consolidation of suppliers (as the OEMs increasingly demand consistent standards and ‘one stop shop’ testing providers across fragmented supply chains), will provide opportunities for Element to grow. The testing market globally remains fragmented, particularly in aerospace where Element already leads the market. There is therefore significant potential to accelerate Element’s growth through further market consolidation. “As a platform investment in a sector with significant consolidation potential, this is an opportunity for Element to continue to grow strongly.” Chris Busby Partner, Head of investment in the UK Not disclosed Transaction size $291m Revenue 1,800 Employees Sector Business Services Location United Kingdom Directors Charles Noall Jo Wetz Bridgepoint representatives Chris Busby Raoul Hughes Website www.element.com 19 New investments New investments MVF 20 MVF is a technology-enabled provider of international online lead generation services to a variety of industry sectors including various B2B markets, market research, relocations, education, clean tech and healthcare. It specialises in online customer acquisition and lead generation using proprietary technology, data-driven analytics and in-house digital marketing expertise to provide some of the world’s leading brands with high volumes of potential new customers that generate a strong return on investment. The global growth in digital advertising spend, and the complexity challenges created by trends such as the rapid growth of mobile advertising, social media and digital marketing channels, is driving a strong demand for outsourced online lead generation to digital specialists like MVF. Although lead generation currently accounts for less than 5% of the digital advertising market, it is growing at 20% pa. MVF is growing rapidly based on strong points of difference including deep in-house online digital marketing expertise, efficient proprietary technology and a scale advantage over competitors that allows it to deliver a high volume of international sales-ready leads to its customers with strong ROI transparency. This investment was made by BDC, the Bridgepoint fund that invests in small and mid-cap companies. Not disclosed Transaction size £36m Revenue 310 Employees Sector Media & Technology Location United Kingdom Directors Jules Hopkinson Tom Morgan Peter Rigby Titus Sharpe Michael Teixeira Bridgepoint representatives Michael Black Robin Lawson Website www.mvfglobal.com “Growth will continue to accelerate as the business deepens its presence in existing industry sectors, adds new ones and expands internationally.” Robin Lawson Director, Bridgepoint Development Capital 21 New investments New investments Nordic Cinema Group 22 Headquartered in Stockholm, the Nordic Cinema Group (‘NCG’) is the leading cinema operator in the Nordic region with 70 cinemas, 472 screens and a 44% share of total Nordic box office revenues. It was formed in 2013 through the merger of SF Bio and Finnkino, although its presence in the region has been built up over many decades through greenfield investments and consolidation in larger cities. NCG’s cinema estate consists of well-invested modern and comfortable cinemas with the latest technology. Sites are typically focused around large and mid-sized cities, and are often in high-footfall locations such as shopping malls, transport hubs or cultural centres. With over 23m admissions per annum NCG has c.10m individual customers visiting its sites across the region each year, equating to almost 30% of the total population. With a strong focus on innovation, NCG cinemas feature premium seating and VIP screening rooms, as well as the first IMAX screen in Sweden, opened in Stockholm in 2015, with a second planned in Oslo in 2017. Although NCG is the clear market leader with a wellinvested estate in prime urban locations, it also has room to expand organically in its core markets. Further scope exists to accelerate growth through smaller bolt-on acquisitions, in the region and in adjacent geographies. As evidenced by growing admission trends over recent years, cinema as an affordable out-of-home experience remains robust despite potentially disruptive technological developments. It also represents an increasingly important and profitable part of the movie industry, notwithstanding these new forms of content delivery. “There is scope to further enrich the whole cinema experience and for NCG to accelerate its growth.” Mikael Lövgren Chairman of Bridgepoint in the Nordic region SEK4.7bn Transaction size SEK2.9bn Revenue 1,500 Employees Sector Consumer Location Sweden Directors Anders Ehrling Erik Haegerstrand Torsten Larsson Simon Wright Bridgepoint representatives Christopher Bley Mika Herold Mikael Lövgren Website www.nordiccinema group.com 23 M a n a g i n g Par t n e r ’ s o v e r v i e w Strategy on track 2015 was a year where we successfully sought new opportunities in growth companies across Europe. M a n a g i n g Par t n e r ’ s o v e r v i e w People and talent 14 new team members joined us in 2015, adding to our strengths and depth. 24 Facing into the future Volatility will create opportunity and we will continue to exploit our position in Europe’s middle market. Bridgepoint Annual Review 2015 Portfolio momentum A message from our Managing Partner Operating highlights I am pleased to report that Bridgepoint enjoyed a strong year in 2015 with our two businesses, Bridgepoint Europe and Bridgepoint Development Capital, achieving excellent results thanks to the performance of the companies owned by Bridgepoint funds and our own team’s skill in investing, managing businesses and selling well. Over the last 12 months we have carefully sought out interesting new investment opportunities in growth companies across Europe. During the year we invested €950 million in seven companies with a total enterprise value of €2.4 billion. In addition, Bridgepoint– owned businesses completed 42 addon acquisitions in the year, pursuing consolidation strategies to build scale and improve their competitive position. Importantly we matched this new investment activity with strong exit results returning some €1.8 billion to our investors in 2015, a number that exceeded our initial expectations for the year by some measure. Resilience and an ability to drive long-term value creation characterised much of the work of our portfolio. Bridgepoint Annual Review 2015 By the end of 2015, Bridgepoint Europe V, the €4 billion middle market buyout fund that we finished raising earlier in the year, had made its fifth investment and its new investments were already pursuing accelerated growth through add-on acquisitions in line with the Fund’s original strategy. Bridgepoint Development Capital II, our €350 million lower mid-market buyout and growth capital fund, has now committed a large part of its primary capital, with 11 transactions in the portfolio at the end of the year. As a result, we expect to return to investors in 2016 to raise a larger successor fund to continue to build this practice, which has flourished under the leadership of Michael Black and his colleagues. “Over the last 12 months we have carefully sought out interesting new investment opportunities in growth companies across Europe. During the year we invested €950 million in seven companies with a total enterprise value of €2.4 billion.” 25 M a n a g i n g Par t n e r ’ s o v e r v i e w 26 Europe and the environment for investing The contrast between improving economic fundamentals in Europe and periodic outbreaks of macro volatility resulted in an uneven year for the investment outlook in 2015. The slowing rate of economic growth in China contributed to weaker European equity market sentiment. This was offset by better than forecast underlying progress in European economies boosted by the benefit of a lower Euro helping the region’s many exporters and falling oil prices continuing to act as an economic stimulus, putting money back into the pockets of consumers. During 2015 acquisition pricing remained high in Europe, driven by favourable debt markets and a recognition from international investors that Europe represented a good cycle play, especially on a currencyadjusted basis. This remained both a blessing and a challenge, depending on whether you were buying or selling. As a result, buying well, which is always our number one focus, required high quality origination, absolute clarity of investment case, transaction selectivity and a focus on relative value based on looking at sector by sector valuations over the long term. M a n a g i n g Par t n e r ’ s o v e r v i e w It also meant that Bridgepoint’s broad investment and operational resources across Europe were deployed with a particular focus on investing in businesses with a combination of characteristics: sustainable end-market growth, disciplined investment at attractive valuations, value creation opportunities via market consolidation and operational expertise. These are all reflected in the new investments made by both BDC and BE in the year. In this environment revenue development initiatives featured heavily in the Bridgepoint portfolio, examples of which include expansion of LGC into China and the US, new school construction at CEG, new classes of vehicle tests for TüvTurk in Turkey, R&D programmes at AHT and eFront, and Solhaga’s expansion outside of Sweden into the Norwegian market. All are aimed at driving sales growth. A continued high level of add-on acquisition activity is also helping value creation. In 2015 this ranged from LGC’s £90m US acquisition (just prior to its subsequent sale at the end of 2015) to smaller in-fill acquisitions completed at CEG, Moneycorp, Foncia, Oasis and Azzurri. “Buying well required high quality origination, absolute clarity of investment case, transaction selectivity and a focus on relative value.” Portfolio performance Fabrice Turcq Investment Director, Paris Revenue growth 11% 2013 12% 2014 9% 2015 EBITDA growth 13% 2013 Bridgepoint Annual Review 2015 Portfolio momentum Bridgepoint funds’ investments collectively generated 9% and 14% year-on-year average revenue and EBITDA growth. This is a real demonstration of our portfolio companies’ continuing resilience and ability to drive long-term value creation in what in Europe remains a relatively low-growth and frequently volatile environment. 11% 2014 14% 2015 Bridgepoint Annual Review 2015 27 M a n a g i n g Par t n e r ’ s o v e r v i e w M a n a g i n g Par t n e r ’ s o v e r v i e w Patrick Fox Partner, Operational Support Group 28 “In 2015 Bridgepoint investments returned over €1.8 billion of capital to investors with seven major exits.” Marc Zügel Partner, Head of investment in Germany Chris Busby Partner, Head of investment in the UK Returning capital to investors In 2015 Bridgepoint investments returned over €1.8 billion of capital to investors with seven major exits, including the sales of Ponant, the specialist luxury cruise operator and market leader in specialist polar cruises, to Artémis, the holding company of French entrepreneur Francois Pinault, Infront Sports & Media to Dalian Wanda Group, one of China’s leading conglomerates; and LGC, the international life sciences company, to KKR, and Quotient Clinical, the early-stage drug development services provider, to GHO Capital. Our Capital Markets team also took advantage of buoyant conditions in the European leveraged loans market to arrange debt totalling €3.4 billion, allowing us to balance better borrowerfriendly terms with the need for prudent leverage in the growth companies that characterise Bridgepoint’s middle market activities. It also meant that our investments continue to enjoy meaningful liquidity, headroom and flexibility as they grow. Finally, at the end of 2015, we also transferred interests in a number of the residual assets in a mature fund, Bridgepoint Europe III, to a global institutional investor. The transaction will provide over €300 million of liquidity to the Fund when it completes in early 2016. Capital returned 2015 2014 2013 2012 Bridgepoint Annual Review 2015 €1.2bn €892m Bridgepoint Annual Review 2015 €1.8bn €2.0bn 29 M a n a g i n g Par t n e r ’ s o v e r v i e w 30 People and talent During the year Bridgepoint welcomed 14 new team members across Europe, including a new partner to our Paris office, Denis Villafranca, and another in Madrid, Héctor Pérez. The strength and depth of our team has always been a distinguishing characteristic of Bridgepoint as a business. Yet we have always recognised that new individuals bring different important perspectives, especially at the beginning of the investment of a new fund. Our ability to continue to develop the talent of our own longstanding team members as well as attract new ones therefore remains critical to our success. If we are to continue to improve, we must evolve. On a more personal note, I want to pay tribute to a group of colleagues who in 2015 independently undertook to fundraise for Myeloma UK, a cancer charity, in memory of a colleague, Jan Hester, who sadly passed away in 2014. A team of 17 colleagues set out to climb the three largest peaks in the UK in 24 hours which they achieved in time. They raised over £31,000 which the Bridgepoint Charitable Trust then matched. M a n a g i n g Par t n e r ’ s o v e r v i e w It’s heartening in these times to see the spirit of cooperation and kindness that people display. Everyone at Bridgepoint was especially proud that people they work with every day undertook such a difficult challenge for a such a worthy cause. 2016: looking ahead As we enter 2016 the volatility that characterised 2015 will continue for some time to come. Perhaps paradoxically, volatility has already created interesting investment opportunities albeit that a targeted approach to investment has to be maintained. That is why the priorities for our Firm in 2016 are very clear. First, we will continue to be disciplined in our pricing and make investments borne of intelligent judgement. This not only means exploiting our attractive position in Europe’s middle market but also buying well with proper regard to risk and reward. It also extends to working to create value in our investments by focusing on revenue growth, operational improvement and accretive add-on acquisitions. Second, we aim to continue to return meaningful amounts of “I want to pay tribute to a group of colleagues who in 2015 independently undertook to fundraise for Myeloma UK, a cancer charity, in memory of a colleague, Jan Hester, who sadly passed away at a young age in 2014.” Guy Weldon Partner and Chief Investment Officer 31 “Our ability to continue to develop the talent of our own longstanding team members as well as attract new ones therefore remains critical to our success.” Bridgepoint Annual Review 2015 Frédéric Pescatori Partner, Head of investment in France Charlotte Kitabgi Senior Associate, Paris Bridgepoint Annual Review 2015 M a n a g i n g Par t n e r ’ s o v e r v i e w M a n a g i n g Par t n e r ’ s o v e r v i e w capital to our investors. Through our sector-based approach implemented locally across a pan-European platform, our funds have consistently generated strong capital returns to our investors throughout different economic cycles. Our aim therefore in 2016 is to continue this trend, with strong realisations as we take advantage of favourable markets for selling assets. And third, as our lower middle market business Bridgepoint Development Capital moves towards making its last investment from its BDC II fund, as noted, we expect it to return to the market in 2016 to raise a larger successor fund for what remains a very attractive and active part of the private equity market in Europe. I, and my fellow partners, are aware of the huge amount of work James Reynolds Investment Director, London 32 “In productive partnership with our management teams and the people working in Bridgepoint companies, we start 2016 excited by the opportunities presented by the times and well positioned for the future.” William Jackson Managing Partner Bridgepoint Annual Review 2015 Bridgepoint Annual Review 2015 and commitment that lies behind Bridgepoint’s results. Behind the achievements I have summarised here are a very dedicated group of people – the management teams and over 90,000 employees of the companies we back. I thank them for their contribution, dedication and hard work in 2015. The ambition of our own Bridgepoint colleagues across Europe and in China has also been undiminished and I thank them too for their energy and commitment. Finally, it’s encouraging to conclude this review by noting that in productive partnership with our management teams and the people working in Bridgepoint companies, we start 2016 excited by the opportunities presented by the times and well positioned for the future. 33 Investment and sector expertise Investment and sector expertise Investment and sector expertise Our aim is to invest in high-performing, well-managed businesses that have the potential to grow through expansion, operational transformation or via acquisition. We focus on six core sectors: Business Services, Consumer, Financial Services, Healthcare, Manufacturing & Industrials and Media & Technology. Each sector team is organised on a pan-European basis, with teams working closely together across offices to build knowledge and ensure proper understanding of the space as well as to identify new and add-on investments. By exploiting this wealth of local knowledge and sector expertise in Europe, we are also able to identify and acquire businesses where significant value can be created under our ownership and where in turn businesses can exploit our reach and know-how to enhance their operational performance, growth prospects and market position. Investment preferences We are attracted by opportunities in sectors and niches with strong underlying growth, typically ahead of the broader economy, segments where Europe has global competitive advantage or in businesses with high visibility of earnings and contracted income. We are especially known for helping to create value through market consolidation – by identifying and arranging funding for add-on acquisitions by the platform businesses owned by Bridgepoint funds – or securing operational improvement to drive earnings growth. In 2015 Bridgepoint portfolio businesses made 42 add-on acquisitions. Our investment teams are able to call upon expertise from a range of specialists whose skills include operational expertise, debt finance structuring and procurement. In addition, Bridgepoint has a portfolio development office in Shanghai which accelerates the development of portfolio companies in China across areas such as market entry, procurement, establishing facilities, add-on acquisitions and joint ventures with local partners. 34 35 27 % Business Services Bridgepoint Annual Review 2015 25 % Consumer 7 % Financial Services 17 % Healthcare Bridgepoint Annual Review 2015 9 % Manufacturing & Industrials 15 % Media & Technology sector expertise: business services sector expertise: business services Business Services Business services, by its nature, is a wide-ranging sector covering everything from professional services to asset rental with much in between. Within this space, our focus is quite specific: we seek out businesses with a clear USP, either in the form of distinctive expertise or proprietary technology that would be hard for a competitor to replicate. It’s often a sector where high quality managers can be found who can bring impact quickly on the performance of a business. 36 27 % of our portfolio is currently invested in this sector Emma Watford Head of Business Services sector As with all our other sector specialisms, our interest in this area comes primarily from its potential for growth. The importance of business services reflects the tendency for successful businesses to focus on their core activity, effectively asking themselves, “Which non-essential parts of our operation could another company do cheaper, faster or better than we can?” The result is the emergence of a group of specialist service companies whose offer goes far beyond simple activities like cleaning or catering. So, for example, in the pensions sector a service company could take care of skilled but non-core activity like loss adjustment. When selecting candidate companies for potential investment, we look for high-quality businesses with a clearly differentiated position and significant potential for value creation. We are particularly interested in opportunities for market consolidation (typically through a process of buy and build), businesses servicing high-growth end user segments, businesses with a high proportion of recurring revenues (often in the form of ongoing contracts rather than one-off fees) and businesses where technology plays a role in creating competitive advantage. Another important part of a business’s appeal is global potential and the ability to serve an international client base. Here Bridgepoint can use its network to help businesses to diversify their geographic presence, enabling them to deploy their specialist expertise to serve customers in a greater range of territories. As with any sector, predicting precisely where growth will occur can be challenging. Nevertheless we believe key opportunities for growth include technology and IP enablement, businesses with exposure to emerging markets (where growth can create a skills gap and the business services industry can be less developed) and services to businesses that maximise the potential of scarce resources. We categorise our sweet spots for investment into two discrete subsectors: professional services, and asset and facility services. Within professional services, we focus on outsourcing and consulting (particularly techenablement and building ‘sticky’ relationships in order to retain revenue), education and training, and testing, inspection and certification. All three are typically high margin, high expertise businesses. Within asset and facility services, we focus on property services, energy and industrial services and transport services, where good management Bridgepoint Annual Review 2015 Bridgepoint Annual Review 2015 and strong market positions typically can make a decisive difference. Our relative focus within these sub-sectors flexes to take account of prevailing trends. Beyond these areas we are also interested in opportunities that overlap other Bridgepoint investment areas such as media and technology, healthcare and financial services. Putting all of this together gives us clear parameters within which to appraise opportunities, taking into account prevailing economic conditions, and the likelihood of future growth prospects. The result enables us to see beyond the short term and take a longer-term, more effective view. €1.7bn Invested in 15 companies in the European Business Services sector in the last 10 years 37 investments in the business services sector investments in the business services sector Anaveo is a provider of electronic security solutions such as video surveillance, security access control and intrusion detection to small and medium sized businesses. It has a network of 11 agencies and 270 employees across France and in 2011 opened a subsidiary in China to set up a direct sourcing strategy and establish a commercial presence there. Date acquired This investment is managed by Bridgepoint Development Capital. Original deal size 2015 Employees 270 Not disclosed Revenue €43.7m A-Katsastus is the leading vehicle inspection company in Northern Europe with 273 stations in Finland, Sweden, Poland, Estonia and Latvia. Its services include compulsory vehicle inspections, drivers’ examinations and vehicle insurance and registration services. Date acquired In 2015, the group continued its network expansion in Sweden and focused on developing new complementary business areas in Finland. 1,160 2006 Employees Transaction size Not disclosed 38 Revenue €111m Beck & Pollitzer is a leading engineering services business specialising in the installation/relocation of industrial plant/ machinery and associated services. Date acquired The company has a blue chip client base across a wide range of sectors including automotive, canning, pharmaceutical and aerospace and, is growing on the back of strong end markets and an increasing propensity for customers to outsource these services, providing an opportunity for Beck & Pollitzer to expand both geographically and across new sectors and services. Employees This investment is managed by Bridgepoint Development Capital. Revenue 2007 700 Transaction size £55m £72m Location France Directors Grégory Louis Fabrice Tisseur Bridgepoint representatives Bertrand Demesse Olivier Nemsguern Website www.anaveo.com Cambridge Education Group (CEG) is one of the largest international schools groups in Europe, providing pre-university education to more than 3,500 students in the UK originating from 80 countries. Date acquired CEG operates four divisions in three countries: ‘CATS’ a Junior and Senior High School network with campuses in Cambridge, Canterbury, London, and Boston in the US; ‘Foundation Campus’ programmes through partnerships with 20 universities in the UK, US and the Netherlands; the College of Visual & Performing Arts in Cambridge; and English as Foreign Language (EFL) schools in the UK and US, operating under the ‘Stafford House’ brand. Employees 1,053 Transaction size £185m Revenue £110m Directors Fergus Brownlee Hetal Shah Sir John Sunderland Bridgepoint representatives Chris Bell Chris Busby Website www.cambridge educationgroup.com Location Finland Directors Kari Kivikoski Ilkka Rantasalo Terhi Vähähyyppä Bridgepoint representatives Michael Davy Patrick Fox Mika Herold 39 Website www.a-katsastus.com Location United Kingdom Directors Andrew Hodgson Janusz Lach Charles Matthews Romain Provoust Fraser Ruciman Bridgepoint representatives Stephen Bonnard Mark Stroud Website www.beck-pollitzer.com Bridgepoint Annual Review 2015 2013 Location United Kingdom Bridgepoint Annual Review 2015 investments in the business services sector CTL Logistics is Poland’s largest private rail logistics company, and, one of the leading private rail operators in Europe with operations across Poland and the neighbouring countries. It provides tailormade logistics solutions focusing on rail transportation, freight forwarding, siding management and waste management for a wide range of sectors from coal and coke, fuels and oil, to agricultural and consumer industries. It operates in some of the largest markets in Europe, including the strategically important East-West rail corridor. investments in the business services sector Date acquired 2008 Employees 1,643 Transaction size Not disclosed Revenue €162m Location Poland Directors Jacek Bieczek Mariola Hola-Chwastek Michał Jóźwiak Jaroslaw Krol Foncia is the market leader in residential property management services in France, Belgium and Switzerland with additional operations in Germany. Date acquired It manages apartment buildings on behalf of all residents collectively and provides a lettings management service to owners of individual apartments. It also provides ancillary services including valuations and insurance/energy broking and real estate transaction services. Employees Bridgepoint representatives Khai Tan Maciej Zuzałek 2011 7,700 Transaction size Not disclosed Revenue €695m Website www.ctl.pl Location France Directors Benoît Fournial Marc Frappier Bruno Keller Anne Lalou Jacques Lenormand Wilfried Piskula Bridgepoint representatives Benoît Bassi Vincent-Gaël Baudet Frédéric Pescatori Website www.foncia.fr Element Materials Technology is a global leader in materials and product qualification testing for the aerospace, oil & gas and transportation markets. Date acquired Acquired in 2015 it has it has 53 laboratories in Europe, the US and China, over 1,800 employees and 10,000 customers worldwide. Employees 2016 1,800 Transaction size Not disclosed 40 Revenue $291m Bridgepoint Annual Review 2015 Location United Kingdom Directors Charles Noall Jo Wetz Bridgepoint representatives Chris Busby Raoul Hughes Website www.element.com Inspired Thinking Group (ITG) is a technology-led marketing services business which serves the growing trend of decoupling the ‘creative’ from the ‘execution’ phase in marketing services and outsourcing the latter. Date acquired In 2015 it won contracts with brands such as Cath Kidston and Bourne Leisure and deepened existing relationships with notable clients such as M&S and Sainsbury’s. It further developed its inhouse digital offering (ITG 360), and grew its presence in the USA, winning a large contract with Claire’s in the territory 350 This investment is managed by Bridgepoint Development Capital. Revenue Bridgepoint Annual Review 2015 2014 Employees Transaction size £28m £68m Location United Kingdom Directors Mark Lovett Stevie Spring Simon Ward Bridgepoint representative Adrian Willetts Website www.inspiredthinking group.com 41 investments in the business services sector KGH is the leading independent customs services provider in Europe with operations in 11 countries and over 14,000 customers. In 2015, KGH won several important contracts with multinational clients on a pan-European basis, where the Company provides strong differentiation versus local competition. The company also continued to invest to build the next generation’s software platform, which is now being piloted and will be launched commercially in 2016. This investment is managed by Bridgepoint Development Capital. investments in the business services sector Date acquired 2013 Employees 700 Transaction size Not disclosed Revenue SEK 581m Leeds Bradford Airport (LBA) serves Yorkshire & Humberside, a region of 5.3 million inhabitants. Since Bridgepoint’s acquisition LBA has consistently been one of the fastest growing airports in the UK. Following an £11m terminal upgrade in 2012, LBA has introduced a range of new routes and airlines including British Airways, Monarch and Thomson. Date acquired 2007 Employees 200 Transaction size £145m 42 Revenue £28.4m LOC Group is an international provider of marine and engineering assurance services to the offshore oil & gas and shipping markets. It is a leading provider of marine warranty surveys required for the transport and installation of offshore capital equipment, and the market leader in marine casualty consultancy for shipping insurers in high-profile incident and dispute cases. Date acquired Established in 1979, it operates from over 30 offices located around the globe and employs 400 staff including master mariners, naval architects, and marine and structural engineers. Transaction size This investment is managed by Bridgepoint Development Capital. Revenue 2013 Employees 400 Not disclosed £65m Location Sweden Directors Vidar Gundersen Michael Olsson Magnus Sjöqvist Bridgepoint representatives Johan Dahlfors Johan Gustafsson TüvTurk is the monopoly provider of statutory vehicle inspections operating 208 stations across Turkey. The company has a 20 year monopoly concession until 2027 and has franchised its operations in 81 regions to 48 franchisees. Date acquired TüvTurk has received approval from the Ministry of Transport for the online sale of mandatory vehicle insurance (‘MVI’), commencing in 2016 which will add significant value add to the business. 871 Employees Transaction size TRY347m Revenue TRY120m Website www.kghcustoms.com Directors Husnu Akhan Matthias Rapp Klemens Schmiederer Erman Yerdelen Bridgepoint representatives Martin Dunn Patrick Fox Website www.tuvturk.com.tr Location United Kingdom Directors Paul French Tony Hallwood John Parkin Simon Whitby Bridgepoint representatives Michael Davy Patrick Fox 43 Website www.leedsbradford airport.co.uk Location United Kingdom Directors David Ballands Robin Bidwell Nadim Butt Edward Guest Andrew Squire Bridgepoint representatives Mayank Kanga Kevin Reynolds Website www.loc-group.com Bridgepoint Annual Review 2015 2009 Location Turkey Bridgepoint Annual Review 2015 sector expertise: consumer sector expertise: consumer Consumer Defining what we mean by ‘Consumer’ is somewhat easier than for some other sectors as everyone has an intuitive idea of what it entails, reflecting the size and importance of the sector and the fact that consumer spending remains one of the main drivers of the European economy. It is also important in private equity investment terms, accounting for c.25% of all private equity transactions in Europe. 44 We segment consumer into four primary subsectors where our knowledge and experience can make a decisive difference: retail, leisure, FMCG and consumer services. We look for companies with clear opportunities for growth, strong brand equity, scope for brand innovation and a firm commitment to service culture. A well-defined CSR programme is also increasingly important, particularly amongst younger consumers. Finally, we seek out companies with the scope for business model improvement, where Bridgepoint in particular can add value. The more of these characteristics a prospective investment has, the more attractive it becomes. If those are the characteristics we look for in potential investment opportunities, where do we think growth will occur in the consumer sector? The answer can be found in our approach to this sector: instead of analysing the space by the specific area of consumer activity (e.g. speciality retail or cinemas), we prefer to identify promising growth areas by theme or driver. This has the flexibility to accommodate advanced business models that do not fit into standard categories. The key drivers we look for include demographics (for example any opportunity that taps into population changes and trends), value versus luxury (particularly relevant in the retail subsector), and experiential (for example occasions or experiences that offer consumers something special). Equally important are the themes of self-improvement (for example health, wellness or educationrelated) and consumer service (typically in terms Bridgepoint Annual Review 2015 25% of our portfolio is currently invested in this sector Jason McGibbon Head of Consumer sector of convenience or efficiency). Identifying promising growth areas by theme or driver contrasts with the more usual sub-segment approach that lacks the flexibility to accommodate outlier or challenger brands. Concentrating on deeper dynamics like this enables us to look closer and see further to identify the most promising opportunities in the consumer space and the qualities of each opportunity that will deliver significant growth. Equally important when evaluating an opportunity is recognising the importance to consumers of local knowledge. In some areas the UK or France will have evolved in slightly different but important ways compared to Turkey or Poland – and vice versa. Having a pan-European team and significant consumer input from our Shanghai team helps us appreciate the distinctions and needs of different markets. We have been investing in consumer businesses for over 30 years, with high-profile transactions like Pets at Home, Alain Afflelou, Nordic Cinema Group and Pret A Manger that Bridgepoint Annual Review 2015 resonate with consumers and of course other management teams. Our deep track record helps us better understand new opportunities and underpins our thematic approach to identifying opportunities for growth. Since it was established, Bridgepoint has invested €3.6bn in over 100 consumer businesses – a long association that enables us to look beyond the cyclical nature of the sector and take a longer, more informed view. €1.9bn Invested in 14 companies in Consumer sector in the last 10 years 45 investments in the consumer sector investments in the consumer sector Azzurri is a leading Italian-themed casual dining group in the UK, operating 250 restaurants under two well-established casual dining brands, ASK Italian and Zizzi, as well as Coco di Mama, a fast-growing Italian-themed quick service food and coffee concept. ASK Italian and Zizzi focus on authentic Italian cuisine with differentiated menu styles and both brands have a long-standing reputation for quality and value for money. Date acquired In 2015 Azzurri continued to grow its footprint with new restaurant openings across both ASK Italian and Zizzi brands and the acquisition of Coco di Mama, a London-based quick-service food brand, serving all-day Italian cuisine, with an expertise in pasta and coffee. £250m Casino France Operations (CFO) (formerly a sister company of the JOA Groupe) is an independent player in the French gaming sector that operates two casinos under a franchise agreement with JOA Groupe. Following the restructuring of JOA acquired in 2005, Bridgepoint and Loto Quebec retained full control and ownership of CFO. CFO’s first permanent casino began operations at the beginning of December 2014, with a second one, in a temporary site in 2015. The permanent location was opened at the beginning of January 2016. 46 2015 Employees 5,700 Transaction size Revenue £218m Date acquired 2005 Revenue Website www.joa-casino.com Date acquired Established in 1993, the company operates from three sites across Poland where it employs over 1,000 people. It has transformed itself from a local single-channel producer into a multi-channel operation with increasing CEE and international presence. Employees 2013 1,032 Transaction size Not disclosed Revenue €86m 2007 Employees 2,730 £360m Revenue £205m Location United Kingdom Directors Will Crumbie Simon Greene Simon Pickering Stuart Rose Mark Seagar Anthony Thompson Bridgepoint representatives Benoît Alteirac Guy Weldon Website www.fatface.com Location France Bridgepoint representative Benoît Bassi Not disclosed Date acquired Transaction size Website www.askitalian.co.uk www.zizzi.co.uk www.cocodimama.co.uk Transaction size 158 Fat Face is a UK retailer of modern, casual clothes with an ‘outdoor lifestyle’ theme, operating a multi-channel model of over 200 directly owned stores with a rapidly growing e-commerce business and an active wholesale operation. A total of 90 stores have been added under Bridgepoint’s ownership. Bridgepoint representatives Michael Black Jason McGibbon Directors Claude Poisson Alain de Pouzihac Dr Gerard is one of the largest producers of branded and cobranded label biscuits in Poland, selling leading brands and highquality products through all retail distribution channels. Bridgepoint Annual Review 2015 Directors Steve Holmes Jim Pickworth Kieran Pitcher Harvey Smyth Employees €10m In 2015, Dr Gerard continued to build its geographical footprint by expanding into Romania with another two subsidiaries opening at the beginning of 2016 in Hungary and the Czech Republic. The recent acquisition of Artur, the Polish biscuit producer, has also further strengthened its position in the marketplace. Location United Kingdom 47 Location Poland Directors Jerzy Glinka Jarosław Zawadzki Bridgepoint representatives Jason McGibbon Khai Tan Maciej Zużałek Website www.drgerard.eu Bridgepoint Annual Review 2015 investments in the consumer sector investments in the consumer sector Histoire d’Or (part of Group Thom) is the largest jewellery retailer in France. It was acquired simultaneously with the market No. 2, Marc Orian, and both were merged securing significant synergies. Date acquired The majority of the Marc Orian estate was converted to the Histoire d’Or format. Today the combined group operates over 580 stores under three banners (Histoire d’Or, Marc Orian and Trésor) including a small and expanding network in Belgium and Italy. Employees In 2015, Histoire d’Or continued to expand its network by opening 33 stores. Le premier bijoutier de France 2010 2,640 Transaction size €599m Revenue €378m Location France Directors Loïc Armand Eric Belmonte Bruno Candelier Jordi Constans Jacques Pancrazi Thomas Simon Maurice Tchenio The Nordic Cinema Group (‘NCG’) is the leading cinema operator in the Nordic region with 70 cinemas, 472 screens and a 44% share of total Nordic box office revenues. NCG’s cinemas are well-invested, modern and comfortable with the latest technology. Sites are typically focused around large and mid-sized cities, located in shopping malls, transport hubs or cultural centres. With over 23m admissions per annum NCG has c.10m individual customers visiting its sites across the region each year, equating to almost 30% of the total population. Date acquired 2010 Employees 1,980 Transaction size Not disclosed 48 Revenue £151m Date acquired 2006 Employees 1,516 Transaction size Not disclosed Revenue €222m 1,500 Transaction size SEK 4.7bn Location Sweden Directors Anders Ehrling Erik Haegerstrand Torsten Larsson Simon Wright Bridgepoint representatives Christopher Bley Mika Herold Mikael Lövgren Website www.nordiccinema group.com Location United Kingdom Directors Lawrence Christensen Dominic Jordan Catriona Marshall Matthew Moore Archie Norman Katherine Paterson Katharine Poulter 49 Bridgepoint representatives Emma Watford Guy Weldon Location Italy Directors Enrico Ceccato Maurizio De Costanzo Paolo Frigati Marco Giorgetta Fabio Pampani Roberto Pisa Bridgepoint representatives Benoît Bassi Raoul Hughes Website www.limoni.com Bridgepoint Annual Review 2015 Employees SEK 2.9bn Website www.hobbycraft.co.uk Limoni is the market leader in the Italian perfumery retail sector with a network of c.400 stores. It also provides a wholesale service to smaller independent Italian perfumeries. 2015 Revenue Bridgepoint representatives Benoît Bassi Frédéric Pescatori Website www.histoiredor.com Hobbycraft is the leading arts, crafts and hobbies specialist retailer in the UK with 83 superstores. Under Bridgepoint ownership and with a new management team in place, it has undergone an extensive operational improvement programme to support growth within the existing estate, further store roll-out and multi-channel development. The business has recently launched a new, smaller store format. Date acquired Bridgepoint Annual Review 2015 investments in the consumer sector Pret A Manger is the UK’s leading retailer of high-quality natural, ready to eat sandwiches, salads and drinks. Founded in 1986, it has over 390 shops in the UK, US, Hong Kong, France and China and employs over 10,000 people. In 2015, Pret’s new franchise model saw the opening of two shops in France located at the Paris Gare du Nord and Nice Airport. investments in the consumer sector Date acquired 2008 Employees 10,235 Transaction size £364m Revenue £671m Location United Kingdom Directors Sinclair Beecham Laurence Billett Nick Candler Anders Dahlvig Clive Schlee Bridgepoint representatives Vince Gwilliam William Jackson Rodenstock is a leading manufacturer of both optical lenses and eyewear, the only company worldwide able to offer both products. It is the No 3 and No 4 respectively in Europe and the world within the optical lenses market, enjoying strong brand recognition and a high reputation for technology leadership in its field among opticians. In 2015, Rodenstock continued to drive top and bottom line growth as a result of increasing business with independent opticians and optical chains in its core European markets. It also strengthened its eyewear business by launching two new licence brands (Bogner and Jil Sander) and made significant investments in launching new products in its lens portfolio. Date acquired 2007 Employees 4,300 Transaction size Not disclosed Revenue €417m Website www.pret.com 50 Location Germany Directors Oliver Kastalio Michael Kleer Peter Körfer-Schün Sven Schirmer Robert Schlitt Bridgepoint representatives Christoph Braks Ian Dugan Website www.rodenstock.com The Dining Club Group is the UK’s largest discount diners’ club with over four million members. It works with some of the country’s most popular restaurant chains, as well as over 6,000 independent restaurants. It operates two branded membership cards, tastecard and the Gourmet Society, and sells memberships through three channels: direct to consumers, to consumers via company employee benefit schemes, and to corporates who offer their customers memberships as part of a bundled offering, such as a premium bank account. Date acquired This investment is managed by Bridgepoint Development Capital. Revenue 2015 Employees 102 Transaction size Not disclosed £17.5m Location United Kingdom Directors Annette Court Dave Cuckney Ben Eaton Sam Shaw Matt Turner Bridgepoint representatives Matt Legg Alan Payne Kevin Reynolds Website www.tastecard.co.uk www.gourmetsociety.co.uk Wiggle is the leading global online retailer of cycling and tri sports equipment. The company has an attractive and loyal customer base of 1.5 million active consumers and it receives 150,000 orders every week via its 13 primary domains. The business delivers to over 70 countries worldwide with 50% of its sales being outside the UK. In 2015 the company consolidated and relocated its distribution facilities to a purpose-built 300k sqft site close to key communications routes in Wolverhampton. Having established market leadership in the UK the business is acting to replicate its success in other attractive markets, particularly Europe. Date acquired 2011 Employees 478 Transaction size £180m Revenue £193m Bridgepoint Annual Review 2015 Bridgepoint Annual Review 2015 Location United Kingdom Directors Stefan Barden Giles David Brian McBride Bridgepoint representatives Patrick Fox Nick Heslop Xavier Robert Website www.wiggle.co.uk 51 sector expertise: financial services sector expertise: financial services Financial Services The financial services sector is broad and in order to make the most of the opportunities it offers, we focus on a number of significant subsectors. These include: insurance (particularly underwriting, broking and associated services), asset and wealth management (both institutional and retail), specialty finance and fintech, all within a European context. Financial institutions themselves, such as retail or commercial banks, are not our prime area of focus. 52 7% of our portfolio is currently invested in this sector The financial services sector is of course an integral part of Europe’s economic and social fabric. Successful service providers must therefore take account of emerging ‘megatrends’ and tailor their services accordingly. For example, access to the web means individuals are increasingly well informed and expect high levels of services, populations across Europe are aging (directly influencing retirement savings planning and pension provision), while a range of new technologies are rapidly changing the way people interact with financial service providers. At Bridgepoint we understand these trends, enabling us to take full advantage of the opportunities they offer. Our size and experience means we can bring considerable resources to bear, not just in terms of capital and people but also in terms of vision and understanding. As to the specific characteristics we look for in investment opportunities, an innovative approach to technology is always highly attractive. This influences everything from distribution and how a financial product is brought to market, to increasing customer satisfaction and stealing a march over competitors. We also look for companies with experienced, motivated staff. Many service businesses are essentially people businesses, so the quality of their people is paramount. In a competitive market, innovative approaches to finding, retaining and William Paul Head of Financial Services sector Bridgepoint Annual Review 2015 Bridgepoint Annual Review 2015 incentivising key individuals become increasingly important. We work well with business owners, management teams and importantly, with regulatory bodies worldwide. Looking ahead, we expect to see regulation to be an ever more important driver of opportunity. Increasing regulatory and compliance standards worldwide will drive many industries towards consolidation and polarisation to smaller numbers of world-leading players. We also expect to see technology continue to drive growth, from improving internal efficiency for financial institutions to increasing choice and service levels for consumers. The result will increase competitiveness and create the right conditions for success. On the service side we expect to see growth coming from increased use of outsourcing and business process re-engineering designed to improve efficiency and profitability. On the product side, insurance continues to be of real interest to us. We also expect initiatives that reflect the megatrends described above to do well. Above all we will continue to look for investment opportunities where we can help a company become market leader, putting them in turn on the radar for future acquisition. In terms of our track record, by focusing on a handful of high-growth areas we have achieved realised returns in excess of three times and what we have learned is enabling us to pinpoint repeatable business models, creating the conditions for continued future success. €500m Invested in four companies in the European Financial Services sector in the last 10 years 53 investments in the financial services sector investments in the financial services sector 1st Credit is a UK debt purchasing agency that acquires debt portfolios from banks, utility suppliers and telecoms companies. Having raised £120m in 2013, it was able to acquire £31m of debt portfolios and in 2014 secure an additional £40m of purchases. Date acquired In 2015, the company has continued to broaden its debt purchasing customer base whilst ensuring it remains focused on the tight compliance regulations within its sector base. 174 2004 Employees Transaction size £67m Revenue £33m Location United Kingdom Directors Simon Dighton Charles Holland Bruce McLaren Eddie Nott Leith Robertson Bridgepoint representatives Patrick Fox Stephen Green Moneycorp is a UK headquartered specialist foreign exchange business with operations in the UK, Ireland, France, Spain and the US. It operates three main businesses – International Payments, Retail and Wholesale. Date acquired International Payments serves small and medium-sized businesses and individuals looking to make international foreign exchange transfers while the business’ Retail division operates from bureaux de change and ATMs at Gatwick, Stansted, three other UK airports and central London locations. The Wholesale division supplies banknotes to banks and financial institutions worldwide. 752 54 Date acquired AFB has three key business lines administering over 10,000 structures for almost 6,000 clients: Corporate Administration which provides incorporation and domiciliation services, Trust Administration which establishes trust structures and then provides day-to-day administration services, and Fund Services, which assists in the launch, incorporation and administration of funds. Transaction size Bridgepoint Annual Review 2015 2015 Employees 350 Not disclosed Revenue $84.6m Employees Transaction size £212m Revenue £130m Website www.1stcredit.com Appleby Fiduciary & Administration (‘AFB’) provides Trust & Corporate Services to a wide range of clients in nine jurisdictions around the world. Clients range from large global corporations from all sectors, to high net worth individuals, families and fund managers, including private equity, hedge funds, real estate and other alternative fund structures. 2014 Location United Kingdom Directors Colin Buchan Nick Haslehurst Mark Horgan Paul Lever Bridgepoint representatives Stephen Green Rob Moores Website www.moneycorp.com Location United Kingdom Directors Farah Ballands Scott Carter Roger Siddle Bridgepoint representatives William Paul Emma Watford 55 Website www.applebyglobal.com Bridgepoint Annual Review 2015 s e c t o r e x p e r t i s e : h e a lt h c ar e s e c t o r e x p e r t i s e : h e a lt h c ar e Healthcare Health is a huge market where Bridgepoint focuses on two areas particularly suited to middle market private equity investment – regulated healthcare and social care. 56 Our interest in this sector is underpinned by a compelling combination of micro and macro growth drivers and the opportunities they present for middle market businesses. At a macro level, ageing populations are driving demand, as is the rise of consumerism in the sector, typically characterised by a growing ‘market’ mentality amongst patients taking a proactive approach to their personal healthcare. Innovation too in healthcare is also driving interesting opportunities for investment. At the micro level, increasing demand for high quality but cost effective care within healthcare systems that are largely publicly funded is creating attractive opportunities for businesses who able to offer outsourced or private pay services. And this in turn is leading to the emergence of branded consumer-focused healthcare businesses seeking to differentiate their offer in the market. Within this broad market Bridgepoint focuses on three specific areas – services, pharma and medtech. These offer a number of highly attractive niches where leading businesses have achieved attractive growth rates. In the services space, pressure on the delivery of national economic targets is creating more and more outsourcing opportunities as providers look for ever greater efficiency in a fragmented and highly regulated market. Consolidation and its attendant benefits of improved operating efficiency and enhanced clinical quality through shared best practice, is also important here. Consolidation, for example, has underpinned the developments in the pharmacy and care home sectors for over 20 years; we believe there are still attractive, unconsolidated areas of the healthcare market across Europe that would benefit from the same approach. In the pharma subsector we are seeing a fundamental transformation of large pharmaceutical businesses, with the outsourcing of manufacturing, clinical Bridgepoint Annual Review 2015 €1.4bn 17% of our portfolio is currently invested in this sector Jamie Wyatt Head of Healthcare sector research and many other functions in order to increase efficiency and cost base flexibility. This too presents opportunities for a middle market private equity investor like Bridgepoint. With certain markets worth $20 billion annually, the opportunity associated with outsourcing alone is therefore highly attractive. Similarly, the opportunity to help a business with proven pharmaceutical products take their domestic offer to an international market plays to our core strengths. In the third of our specialist areas – medtech – innovation is rapidly changing the way procedures are conducted. One of the most exciting developments in this area is the use of robotic equipment in surgical procedures, typically in the form of enabling remote surgical input from a consultant or minimising invasive surgery. We are focused on finding opportunities in attractive long-term growth market niches where we can help support businesses to accelerate their growth. That might be through investment in new facilities, taking a new product going into an untapped market, or offering currently constrained Bridgepoint Annual Review 2015 Invested in 10 companies in the European Healthcare sector in the last 10 years services which people are willing to pay to access. This is certainly reflected in our experience in private pay nursing homes and private dentistry. Overarching our three areas of interest in the sector is quality. Given the highly regulated nature of the market and the obvious importance nationally and individually of healthcare, quality is fundamental. And almost as important is the ability to articulate a particular offer in an attractive, appropriate way and explain why a user should buy a particular product or service. Solutions take many forms, but already we are starting to see the arrival in the healthcare sector of quality reviews that introduce a patient-driven scoring system for healthcare providers. Bridgepoint has completed over 55 investments in the healthcare space, achieving strong returns for our investors. As a result, it has a substantial track record of building efficient, effective and quality-driven businesses, reflecting both the importance of healthcare as a sector and its attractiveness as an investment opportunity. 57 i n v e s t m e n t s i n t h e h e a lt h c ar e s e c t o r Balt is a leading French medtech business in the fast-growing neurovascular market. Founded in 1977, it specialises in the design, manufacture and distribution of neurovascular devices and products that treat complex, life-threatening conditions of the brain, specifically strokes, aneurysms and arteriovenous malformations (AVMs). The company employs 90 people at its facilities in Montmorency (France) and Gland (Switzerland). Balt serves French hospitals directly and has an international network of over 100 distributors worldwide. i n v e s t m e n t s i n t h e h e a lt h c ar e s e c t o r Date acquired 2015 Employees 90 Transaction size Not disclosed Revenue €40m Location France Directors Hervé Novelli Nicolas Plowiecki Marina Plowiecki Stéphane Regnault Oern Stuge Date acquired Compagnie Stéphanoise de Santé is the principal independent operator of clinics in the Rhône-Alpes region of France. It was founded in 2005 through the combination of three clinics and the subsequent addition of further facilities in the Rhône-Alpes, Aquitaine and Auvergne regions. It now operates from eight sites, mainly polyclinics that offer a broad range of specialist medicine and surgery. Employees This investment is managed by Bridgepoint Development Capital. Not disclosed Bridgepoint representatives Vincent-Gaël Baudet Frédéric Pescatori 2011 1,300 Transaction size Revenue €120m Website www.balt.fr Care UK is the leading private provider of health and social care services to the public and private sectors. It provides residential social care and primary/secondary healthcare services. Since investment, Care UK has increased the number of care homes from 59 to 113 and nearly doubled the number of residents to c.6,000. Date acquired 2010 Employees 14,500 Transaction size £414m 58 Revenue £687m Location United Kingdom Directors Mike Parish Phil Whitecross Bridgepoint representatives Raoul Hughes Rob Moores Directors Bruno Limonne Jean Rigondet Jean François Sautereau Bridgepoint representatives Bertrand Demesse Aymeric Marraud des Grottes Olivier Nemsguern Website www.groupec2s.fr Diaverum is the third largest corporate provider of dialysis treatment in the world and the second largest independent dialysis service provider in Europe. It treats 27,600 patients, through 329 clinics, located in 19 countries across Europe, South America, Australia, the Middle East and Asia. In 2015, Diaverum continued to build its geographical footprint by expanding into Kazakhstan, establishing an office in China, and strengthening its position in Romania through a strategic add-on acquisition. Date acquired 2007 Employees 7,611 Transaction size Not disclosed Revenue Website www.careuk.com €583m Médipôle Partenaires (created by the merger of Médipôle with MédiPartenaires in June 2014) is the second largest independent private hospital group in France. The group operates 38 clinics and 6,600 beds in France’s most demographically attractive regions and covers the patient’s full ‘care pathway’ including high-margin pre and postoperative care. Date acquired 2011 Employees 8,500 Transaction size Not disclosed Revenue €865m Bridgepoint Annual Review 2015 Location France Bridgepoint Annual Review 2015 Location Sweden Directors Dag Andersson Björn Brixer Annette Kumlien Alan Milburn Bridgepoint representatives Martin Dunn Héctor Pérez Website www.diaverum.com Location France Directors Benoît Fournial Marcel Hermann Bridgepoint representatives Benoît Bassi Vincent-Gaël Baudet William Paul Fabrice Turcq Website www.medi-partenaires.com 59 i n v e s t m e n t s i n t h e h e a lt h c ar e s e c t o r Oasis is the leading branded provider of public and private dentistry in the UK and Ireland. Acquired in 2013 with c.200 practices, the business has grown through acquisition to over 350 practices. In 2014 the company completed the £30m acquisition of Smiles, a chain of 77 largely private-pay focused practices. In 2015 Oasis added 34 new practices in the UK, as well as three greenfield sites. i n v e s t m e n t s i n t h e h e a lt h c ar e s e c t o r Date acquired 2013 Employees 3,500 Transaction size £183m Revenue £275m Location United Kingdom Directors Justin Ash Bill Colvin Jordi Gonzalez David Leatherbarrow Julian Perry Stuart Rose Bridgepoint representatives Patrick Fox Jamie Wyatt Phlexglobal is a specialist provider of technology-enabled document management solutions and other support services to the global pharmaceutical market. It is a recognised leader in technologyled solutions for the management of Trial Master Files (TMF), a key component of clinical trials. It specialises in software and services used by global pharmaceutical, biotech sponsors and clinical research organisations to manage their TMFs clinical trial records. This investment is managed by Bridgepoint Development Capital. Date acquired Locations United Kingdom/ United States Employees Directors Stella Donoghue Steve Kent Peter McNaney Rick Riegel Karen Roy 2014 219 Transaction size £42m Revenue £20.1m Website www.oasisdentalcare.com Bridgepoint representatives Matt Legg Kevin Reynolds Website www.phlexglobal.com 60 61 Bridgepoint Annual Review 2015 Bridgepoint Annual Review 2015 s e c t o r e x p e r t i s e : M a n u fa c t u r i n g & I n d u s t r i a l s s e c t o r e x p e r t i s e : M a n u fa c t u r i n g & I n d u s t r i a l s Manufacturing & Industrials Manufacturing & Industrials is one of Bridgepoint’s most international areas of interest, touching many different geographies and including many different technologies. Our interest in this sector reflects its importance to everyday life: the sector is ultimately responsible for creating the products and associated services that make the world work. As a sector it may not always be high profile, but it is unquestionably of high importance. 9% of our portfolio is currently invested in this sector Chris Bell Head of Manufacturing & Industrials sector 62 Its significance reflects a number of contemporary global ‘megatrends’. For example, emerging market growth, increasing urbanisation and the importance of aerospace and transport are all global issues that directly impact the sector. Take one example: in China alone, 50 new airports are being built to accommodate anticipated increases in domestic and international air travel. Similarly, the global middle classes are growing at 18% annually, with a corresponding increase in demand for products and services originating in the manufacturing and industrial sector. Increased global energy demand will make the need for energy efficient products more important than ever, while robot usage is increasing at between 5% and 8% annually, with key areas like automotive robotics growing at over 10%. Understanding and exploiting these megatrends is at the heart of our approach to investment in this sector. Interestingly, the sheer importance of Manufacturing & Industrials makes it a particularly robust sector, with many companies able to take market cycles in their stride. The type of companies we are interested in tend to have welldeveloped, well tested business models. Another reason for our interest is the scale of opportunity. In Europe there are over 2,500 manufacturing and industrial companies in our size range, a rich seam we are able to work through to identify promising investment opportunities. In addition, Europe enjoys market leadership in the form of unique manufacturing companies that produce niche products with ready demand around the world. Against this background Bridgepoint focuses on four key segments within the sector that we believe will experience significant growth, reflecting the global megatrends mentioned above: industrial products, aerospace, energy and power and chemicals, with secondary interest in building products and automotive. We look in particular for international companies with real points of differentiation, high recurring income and strong pricing power. As a result, almost all the companies in this sector we have acquired in recent years have demonstrated strong earnings margins. We are also attracted to new products and technologies with a clear reason to exist, as well as hybrid product/service offerings where a product is recontextualised as a service. Bridgepoint Annual Review 2015 Bridgepoint Annual Review 2015 Bridgepoint has been investing in industrial and manufacturing businesses for 30 years and has built up a wealth of knowledge and experience that we continue to put to good use today. We have a longstanding track record in this space and have invested €2 billion of equity in 25 companies and achieved strong returns. In the last eight years we have acquired six businesses, making Bridgepoint one of the most active PE funds in Europe in this sector. €1bn Invested in seven companies in the European Manufacturing & Industrials sector in the last 10 years 63 i n v e s t m e n t s i n t h e M a n u fa c t u r i n g & I n d u s t r i a l s s e c t o r i n v e s t m e n t s i n t h e M a n u fa c t u r i n g & I n d u s t r i a l s s e c t o r AHT Cooling Systems is the leading manufacturer of commercial ‘plug-in’ refrigeration equipment for some of the largest and fastest growing food retailers and food/beverage producers in the world. Date acquired In 2015, the company, which is known for its lower cost, energy efficiency, flexibility and speed of delivery, continued in rolling out its new product range – plug-in wall-mounted cabinets – across Europe. It also made significant investments in new product development that will strengthen its reputation as an innovation leader for plug-in commercial refrigeration cabinets. AHT continued to build its geographical footprint by opening offices in the Nordics and Russia and identified interesting overseas growth opportunities. Employees Director Hans Aage Joergensen Transaction size Bridgepoint representatives Michael Davy Marc Zügel Revenue Website www.aht.at/en 2013 1,250 Not disclosed €365m Location Austria DMC Power sells permanent couplings and associated tooling to the North American electricity transmission and distribution industry for use primarily in high voltage electricity sub-stations. Its technology is unique in its industry and is successfully displacing welded and bolted connection techniques, which it materially outperforms. In 2015 the company was granted patents for its new transmission live and grounding connectors. DMC Power was part of another Bridgepoint investment, Permaswage, the market leader in the manufacture of permanent and separable couplings for aerospace companies, before the latter was sold to PCC, with Bridgepoint retaining its stake in DMC Power. Date acquired 2007 Employees Directors Eben Kane Tony Ward Transaction size Bridgepoint representative Michael Davy Revenue Website www.dmcpower.com 125 Not disclosed $24.7m The Flexitallic Group is the market leader in customised highperformance mission-critical sealing solutions and products to the global oil, gas and power generation industries. Date acquired Headquartered in France, the company has eight production sites in the US, Canada, UK, France, Middle East and China, with almost threequarters of its revenues sourced from North America. It serves a longstanding client base of over 900 clients thanks to a technical sales force who set industry-leading standards of service and reliability. Employees 64 2013 1,000 Transaction size €450m Revenue $200m Bridgepoint Annual Review 2015 Bridgepoint Annual Review 2015 Location United States Location France / Global Directors Gerry Maters Jon Stokes Bridgepoint representatives Michael Davy Ian Dugan Frédéric Pescatori Website www.flexitallicgroup.com 65 sector expertise: Media & Technology sector expertise: Media & Technology Media & Technology In the past the distinction between media and technology was obvious; today that boundary is increasingly blurred as media resources and channels migrate online – to the extent that it is sometimes hard to say whether a particular product or service belongs under one heading or the other. In short, the old divide between TV, radio, cinema and sports on the one hand, and software and the internet on the other is largely irrelevant. 66 Our interest in this fast-moving sector reflects the fact that the world is increasingly online. Platforms and marketplaces are rapidly digitising, while the impending ‘internet of things’ promises to open up a whole new world of opportunity. This dynamic has another important implication: technology businesses have a global market from day one, and global means increased potential for growth in the form of access to lucrative US and Asian markets. As a growth investor, technology is therefore an obvious area of interest for Bridgepoint. It’s equally important that technology touches and influences all our areas of interest. In many cases it makes more sense to think of technology as a horizontal, cross-sector function rather than a discrete vertical like Consumer or Healthcare. Technology’s all-pervasiveness means it is essential we understand precisely how it can enhance how we work, knowledge we can then use to inform our investment decision-making. In terms of actual investments, the media & technology companies we are interested in all share certain characteristics. Clearly there has to be a market for whatever they are selling. We also look for companies with the right team and resources in place to implement their strategy. In a sector where hype can sometimes outstrip performance, their ability to actually deliver is crucial. At the same time we look for companies whose products have the widest possible market, Bridgepoint Annual Review 2015 15% of our portfolio is currently invested in this sector Xavier Robert Head of Media & Technology sector in the sense that they are not closely tied to the laws or practices of a particular country. The more globally relevant a product or service is, the better. Another important characteristic we look for is a business model based on subscription rather than advertising. Subscription churn rates tend to be low, so income streams are steady and predictable. Relying on advertising alone is far more challenging and unpredictable. Companies that meet these criteria can deliver impressive results, often, as is the case with successful software businesses, achieving high double-digit profit on sales. Their products tend also to be “sticky”, in the sense that changing to a competitor’s offering involves major upheaval, encouraging companies to stick with what they have. Looking ahead, we foresee opportunity driven by one of the key characteristics of this sector: the sheer pace of change. In many subsectors business models are far from established, so we closely monitor the latest developments in order to identify interesting opportunities the moment they emerge. Bridgepoint Annual Review 2015 It is an approach that has worked, enabling us to use our knowledge and experience to profitable use. By shifting our focus from traditional media to the world of technology, we have created the right conditions for the companies we back to succeed long into the future. €1.5bn Invested in 10 companies in the European Media & Technology sector in the last 10 years 67 investments in the Media & Technology sector investments in the Media & Technology sector BigHand is the largest provider of productivity-enhancing software for busy time-focused professionals in the legal, healthcare and professional services markets. Date acquired It currently supports over 250,000 professionals globally across 1,950 customer organisations with offices in London, Chicago, Sydney, Toronto and Eindhoven. The company recently launched BigHand V5, an upgrade and expansion of its software product suite. This new innovation means BigHand is now able to offer a range of products across ‘speech, delegation’, ‘process’ and ‘improvement’ themes to their growing and international customer base. Employees This investment is managed by Bridgepoint Development Capital. £25m Dorna SBK is an international sports management business that holds the exclusive global rights to organise the FIM Road Racing World Championship (MotoGP) until 2041, and, the FIM World Superbike Championship (SBK) until 2036. The company generates its revenues from race circuit fees, TV broadcast contracts, sponsorship and advertising as well as corporate hospitality services. 2012 146 Transaction size £48m Revenue Date acquired 2013 Employees 316 Transaction size Not disclosed 68 Revenue €309m Bridgepoint Annual Review 2015 Location United Kingdom Directors Jon Ardron Ian Churchill Graham Gilbert Sam Toulson Bridgepoint representatives Alan Payne Mark Stroud eFront is the leading software provider of financial solutions for managing alternative investments. It provides end-to-end solutions dedicated to the financial services industry, specialising in enterprise risk management and alternative investments. Date acquired Its solutions serve more than 800 customers and over 100,000 users in 48 countries serviced by 21 offices worldwide, including many of the largest blue chip private equity investors and managers worldwide, typically those with private equity investments greater than $1bn. 633 2015 saw eFront attain a double digit growth rate, adding more than 100 new clients in the year. Website www.bighand.com 2015 Location France Employees Director Olivier Dellenbach Transaction size Bridgepoint representatives Martin Dunn David Nicault Xavier Robert €300m Revenue $102.7m Website www.efront.com Location Spain Directors Enrique Aldama Carmelo Ezpeleta Bridgepoint representatives William Jackson José Maria Maldonado William Paul 69 Website www.dorna.com Bridgepoint Annual Review 2015 investments in the Media & Technology sector investments in the Media & Technology sector In December 2013, Groupe Moniteur merged with Infopro, creating the number one professional information group in France. The group provides quality and value added content for various sectors such as automotive, construction and local authorities. Today it is one of the most advanced information groups following its migration from print to digital media. Date acquired In 2015, Infopro completed the acquisition of EBP Group, a provider of trade publications and data to the construction industry headquartered in Belgium. This will enable the group to expand its international footprint and offers significant cost savings. Transaction size Directors Henry Capelle Christophe Czajka Thomas de Villeneuve Eddie Misrahi Revenue Bridgepoint representative Benoit Bassi 2006 Employees 2,400 Not disclosed €291m 70 Location France Website www.infopro-digital.com Date acquired Its principal activities are in the Netherlands, Sweden and Belgium where it has market-leading positions, providing content and e-learning materials for primary schools, secondary schools and further education colleges. Products span interactive software, online learning, e-books, audio books and textbooks. It also has an active product development programme to meet the needs of new and developing curricula. Employees Directors Clive Hay-Smith Natascha van Nieuwenburg Transaction size Bridgepoint representative Daniel Wagener Revenue Website www.infinitaslearning.com 625 €774m €217m MVF is a technology-enabled provider of international online lead generation services to a variety of industry sectors including various B2B markets, market research, relocations, education, clean tech and healthcare. Date acquired It specialises in online customer acquisition and lead generation using proprietary technology, data-driven analytics and in-house digital marketing expertise to provide some of the world’s leading brands with high volumes of potential new customers that generate a strong return on investment. 310 This investment is managed by Bridgepoint Development Capital. Revenue 2015 Employees Transaction size Not disclosed £36m Date acquired During 2015, Trustly has continued to broaden its network of integrated merchants and banks and has expanded its geographical coverage with 21 new European markets, for a total of 29 countries. Revenue The investment is managed by Bridgepoint Development Capital. Employees 88 Transaction size Not disclosed SEK 193m Directors Andreas Bernstrom Lukas Gratte Carl Wilsson Bridgepoint representatives Johan Dahlfors Magnus Gottås Website www.trustly.com 71 Location United Kingdom Directors Jules Hopkinson Tom Morgan Peter Rigby Titus Sharpe Michael Teixeira Bridgepoint representatives Michael Black Robin Lawson Website www.mvfglobal.com Bridgepoint Annual Review 2015 2014 Location Sweden Location The Netherlands Infinitas Learning is one of Europe’s leading educational content companies, providing a range of innovative and engaging products and services for teaching and learning. 2007 Trustly was founded in 2008 and provides a proprietary online banking e-payment solution which is designed to make online payments more convenient, faster, simpler and safer. It currently handles around 1.5m payments per month with the business targeting online merchants who value safety, high sales conversion, consumer convenience and those who are at the forefront of adopting new technology. The company is focused on merchants with large volumes of pay-ins/pay-outs who value real-time processing and account reconciliation functionality. Bridgepoint Annual Review 2015 C u rr e n t i n v e s t m e n t s C u rr e n t i n v e s t m e n t s Current investments Portfolio company Date acquired Original deal size Revenue Fund Fat FaceConsumer 2007 £360m £205m BE III Flexitallic Manufacturing & Industrials 2013 €450m $200m BE IV Foncia Business Services 2011Not disclosed €695m BE IV €378m BE IV Portfolio company Sector Date acquired Original deal size Revenue Fund Histoire d’Or Consumer 2010 1st Credit Financial Services 2004 £67m £33m BE II HobbycraftConsumer 2010Not disclosed £151m BE IV AHT Cooling Systems Manufacturing & Industrials 2013Not disclosed €365m BE IV Infinitas Learning Media & Technology 2007 €217m BE III A-Katsastus Group Business Services 2006Not disclosed €111m BE II Infopro Media & Technology 2006Not disclosed €291m BE III Anaveo* Business Services 2015Not disclosed €43.7m BDC II Inspired Thinking Group* Business Services 2014 £68m BDC II Appleby Fidicury Services Financial Services 2015Not disclosed $84.6m BE V KGH Customs Services* Business Services 2013Not disclosedSEK 581m BDC I/II 2015 £218m BE V Leeds Bradford Airport Business Services 2007 £28.4m BE III 2006Not disclosed €222m BE III AzzurriConsumer 72 Sector £250m €599m €774m £28m £145m Balt Healthcare 2015Not disclosed €40m BE V LimoniConsumer Beck & Pollitzer* Business Services 2007 £55m £72m BDC I LOC Group* Business Services 2013Not disclosed £65m BDC II BigHand* Media & Technology 2012 £48m £25m BDC I/II Médipôle Partenaires Healthcare 2011Not disclosed €865m BE IV Cambridge Education Group Business Services 2013 £185m £110m BE IV Moneycorp Financial Services 2014 £130m BE IV Care UK Healthcare 2010 £414m £687m BE IV MVF* Media & Technology 2015Not disclosed £36m BDC II 2015SEK 4.7bnSEK 2.9m BE V Healthcare 2013 £183m £275m BE IV Healthcare 2014 £42m £20.1m BDC II BE III Pret A Manger Consumer 2008 £364m £671m BE III $24.7m BE III Rodenstock Consumer 2007Not disclosed €417m BE III 2013Not disclosed €309m BE IV The Dining Club Group*Consumer 2015Not disclosed £17.5m BDC II 2013Not disclosed €86m BE IV Trustly* Media & Technology 2014Not disclosedSEK 193m BDC II $102.7m BE IV TüvTurk Business Services 2009TRY347mTRY120m BE IV $291m BE V WiggleConsumer 2011 BE IV Casino France Operations Consumer 2005Not disclosed €10m BE II Nordic Cinema GroupConsumer Compagnie Stéphanoise de Santé (C2S) Healthcare 2011Not disclosed €120m BC I Oasis Dental CTL Logistics Business Services 2008Not disclosed €162m BE III Phlexglobal* Diaverum Healthcare 2007Not disclosed €583m DMC Power Manufacturing & Industrials 2007Not disclosed Dorna SBK Media & Technology Dr GerardConsumer £212m eFront Media & Technology 2015 €300m Element Materials Technology Business Services 2015Not disclosed * Denotes a Bridgepoint Development Capital investment * Denotes a Bridgepoint Development Capital investment Bridgepoint Annual Review 2015 Bridgepoint Annual Review 2015 £180m £193m 73 I n v e s t i n g r e s p o n s i b ly I n v e s t i n g r e s p o n s i b ly Social factors Environmental factors Energy use, waste and recycling, water use and conservation, and supply chain environmental management. Through our board representatives, we work with management teams of investee companies to implement appropriate social policies in their operations and procedures. Governance factors Companies in which Bridgepoint invests have similar governance structures in place to ensure compliance with the law and effective monitoring of their performance. Investing responsibly We’ve built responsible investing principles into our work and business practices, recognising that being a responsible investor is quite simply good for our business. That is why we have put in place strong environmental, social and governance principles. This approach is overseen by our Audit & Risk Committee, comprising senior members of the team and led by the chairman of our Advisory Board. As a signatory of the United Nations’ Principles for Responsible Investment we also publicly undertake to demonstrate our commitment to embed relevant environmental, social and governance (‘ESG’) criteria into our decision-making and ownership practices and in that of the management teams of the companies our funds own. 74 75 “We build responsible investment principles into all of our work and business practices.” UNPRI Bridgepoint Charitable Trust Bridgepoint is a signatory of the United Nations Principles for Responsible Investment. Daniel Wagener Director, Bridgepoint Bridgepoint has a charitable foundation formed and funded by the Firm and its employees that focuses on charitable activities in the broad areas of education and the environment within Europe. Bridgepoint Annual Review 2015 Bridgepoint Annual Review 2015 After we make an investment VE ME NT N ES GA ST VE T RC O MM UNI S 3. P O N TI E TY IR NV ON ME SO CI G E AL E OV RN AN C ES Social factors Governance factors We charge our portfolio management teams to instigate a range of initiatives that typically seek to improve energy and water use, waste recycling and more ethical supply chain management. This also means expecting suppliers to be able to demonstrate material compliance with relevant local, national and international environmental laws. Through our board representatives, we work with management teams of investee companies to implement appropriate social policies in their operations and procedures. These focus on employee health and safety, labour rights and welfare. Minimally, we expect suppliers to be able to demonstrate material compliance with local, national and international labour laws including those relating to health and safety. Companies in which Bridgepoint invests have similar governance structures in place to ensure compliance with the law and effective monitoring of their performance. They are also structured so that major decisions by a portfolio company can only be reached with the agreement of Bridgepoint. Bridgepoint Annual Review 2015 ES E IN ITTE TEE 1. PR MM ITI TIC MIT UN T CO RT AC OM M E PO PR EN YC ES E SK G EN OP ST EM ES ENT TH RI IN OR W AG DE IT V TM NV EI IN AR BE OA UD ISK NV Bridgepoint investment lifecycle 4. R ING BR AN AD ,A OR 2. I NT NT DR ME ME ION IS ST EST R AT AN AL YS IS UNE Environmental factors Maciej Chrystowski Investment Director, Paris Bridgepoint Annual Review 2015 PL Gwenaëlle Le Ho Daguzan Director, Paris INV SH 76 REM EX Once a company becomes part of our portfolio, we work with management teams to implement appropriate environmental and social policies in their operations and procedures that are relevant to their sector and in accordance with industry standards. We encourage investee companies to work with like-minded trading partners to assess the material environmental and social risks of their operations and to work towards relevant international good practice standards to mitigate future risks with targets and timelines for improvement. EST compliance with statutory or regulatory requirements, Bridgepoint agrees plans with management for remedying this within an appropriate time period. We also expect each portfolio company to assess the material environmental risks of their operations and to work towards relevant international good practice standards to mitigate environmental risks with targets and timelines for improvement. This is normally included within our 100-day plan when we acquire a business. INV For new investments, Bridgepoint identifies material environmental and social risks and opportunities as part of its investment selection process. We do so by requiring that pre-investment proposals include an analysis of ESG issues that are brought to the attention of our Investment Advisory Committee. Portfolio companies must comply with relevant environmental and employment laws, particularly in relation to employees’ health and safety, rights and welfare. If a company is only in partial E ESG in practice Before we make an investment... AL I n v e s t i n g r e s p o n s i b ly NT I n v e s t i n g r e s p o n s i b ly 77 I n v e s t i n g r e s p o n s i b ly I n v e s t i n g r e s p o n s i b ly Integrating responsible and sustainable investing into our portfolio Case study Case study Pret A Manger Alongside its own dedicated higher welfare chicken flocks, in 2015 Pret A Manger made further progress in welfare standards in duck, lobster (US), laying chickens (US) and pork. Compassion in World Farming awarded the company in the USA the good (whole egg) award. The Pret Coffee Fund, now in its second year, is supporting 81 young farmers in one of its main Peruvian coffee cooperatives through a coffee growing training programme that also encourages and develops entrepreneurial diversification. Seed funding was also provided for an organic fertiliser development programme. 78 Bridgepoint Annual Review 2015 Oasis Case study Tastecard Over the last four years Tastecard has been a sponsor of Mary’s Meals, an international effort focused on breaking the poverty cycle by bringing food and education to the world’s poorest communities. In 2015 Mary’s Meals provided a daily meal in a place of education to over 1m children across the world. Tastecard, through the support of colleagues and card members, raised over £230,000 for Mary’s Meals to establish five school feeding programmes across Malawi, providing food to thousands of children every day. Oasis Dental Care is the leading provider of private dentistry in the UK and Ireland. 70% of its practices now offer a programme of outreach and oral health education to their local communities. All precious metals (from extractions and treatments) are responsibly recovered. 50% of recovery funds are used for other ESG activities including nurse volunteers for their charity partner, Bridge2Aid, training rural health workers in emergency dental care in Tanzania. Case study Fat Face In 2015, Fat Face developed its sustainability strategy to reflect key sustainability trends in the retail and garment sectors. With five key pillars, it covers all aspects of the business, with a greater investment in responsible sourcing. This included a supplier development and capacity building programme aimed at improving social and environmental performance of Fat Face’s Chinese suppliers. The company’s commitment to sustainability also led to an increase in activity by the Fat Face Foundation – most notably the unique and innovative ‘Thanks for Giving’ campaign, which replaced the traditional Black Friday mass discounting of other retailers and resulted in £295,419 being raised for charity in 2015/16. Bridgepoint Annual Review 2015 79 I n v e s t i n g r e s p o n s i b ly I n v e s t i n g r e s p o n s i b ly Bridgepoint is led by an experienced team of partners and is managed by a Board drawn from the Partnership Ben Martin Legal Counsel, London The group board, Bridgepoint Advisers Group, has executive responsibility for setting the Firm’s strategy and ensuring that the shared values and business objectives we have set ourselves are upheld and met. Its members include: 80 John Barber Benoit Bassi Michael Black Chris Busby Raoul Hughes William Jackson José María Maldonado Frédéric Pescatori Guy Weldon A list of partners and other colleagues is profiled in full on the Bridgepoint website (www.bridgepoint.eu) The Firm supports and endorses the recommendations of the Walker Guidelines for greater disclosure and transparency in private equity. Bridgepoint Annual Review 2015 Bridgepoint has a number of governance structures to ensure that it remains accountable and transparent, and that there is complete alignment of interest between the Firm and its investors. Operating Committees for each of our two areas of activity, Bridgepoint Europe and Bridgepoint Development Capital, are charged with our day-to-day operations in these areas. Investment decisions are reached through an Investment Advisory Committee comprising members of the group board as well as other partners with specific sector or operating expertise. Remuneration, Audit and Risk Committees ensure the proper and fair allocation of the laws and regulatory practices. European Advisory Board The Firm also benefits from the input of a European Advisory Board. It works to provide insight, knowledge and experience to allow Bridgepoint team members to make better informed decisions about investments and development as a firm. It comprises figures from different aspects of corporate and political life who are able to provide us with external perspectives on strategic, political, social and other matters to supplement the expertise of the Bridgepoint team. 81 Risk Management A partner-level General Counsel is responsible for ensuring that the Firm respects and adheres to internal policies and operating procedures. Internal guidelines are also in place to eliminate conflicts of interest, taking into account the Firm’s obligations under its fund management agreements and fiduciary duties. In addressing conflicts, it seeks to do so with integrity, professionalism and in the best interest of its investors. Each Bridgepoint fund also has an Investors’ Committee drawn from representatives of investors in that fund to provide a forum for discussion of the fund’s investment strategy or performance and any potential or actual conflicts of interest. Bridgepoint Annual Review 2015 I n v e s t i n g r e s p o n s i b ly I n v e s t i n g r e s p o n s i b ly Aenilce Bridgepoint Charitable Trust Our work in the broader community 82 Bridgepoint has a charitable foundation formed and funded by the Firm and its employees that focuses on charitable activities in the broad areas of education and the environment within Europe. The Bridgepoint Charitable Trust (‘BCT’), with 10 trustees (including three independent trustees), aims to provide support to adopted charities in the countries where we operate as well as tactical support to the charitable activities of individual team members. Candidate charities are suggested by local offices for the trustees to consider, from which a shortlist is drawn up and then voted on by team members across the Firm. 2015 Spain BCT also matches the charitable fund raising efforts of individual staff members and supports the charities sponsored by colleagues or companies having a close relationship with the Firm. In 2015 we donated over £350,000 to charities, including the six adopted by Bridgepoint offices – Fryshuset in Stockholm, Un Orchestre a l’École in France, Teens and Toddlers in the UK, Gut Hausen in Germany. These were joined in 2015 by two new charities: AENILCE in Spain and Fundacja Dzieci Niczyje, or the Nobody’s Children Foundation, in Poland. To date, BCT has made over £1.6 million in donations to charitable endeavour across Europe. Fundacja Dzieci Niczyje New charity Aenilce is a Spanish charity that operates a day-care centre for children and teenagers with severe brain disabilities, providing specialist treatment including physiotherapy, speech therapy and psychology. BCT is supporting the charity as it expands its activities into a larger building which requires renovation work to triple its capacity to 60 children. The investment includes the renovation of various rooms in the building, adapting the rooms to the special requirements of children, and buying new equipment. Construction work on the new centre started in October 2015 and the Foundation is confident that the building will be fully operational by June 2016 when it can start welcoming children. Our team in Madrid will also support the project in different ways including helping with financial analysis, negotiations with banks, extending their relationship as the new building takes shape. 2015 Poland Bridgepoint Annual Review 2015 www.fundacionaenilce.org 83 New charity Fundacja Dzieci Niczyje, or the Nobody’s Children Foundation, is a non-governmental, not-for-profit charity which was established in 1991 within the Polish activities of Médecins du Monde. Originally devised to address ‘social orphanhood’ (hence its name), it has developed over the years to protecting children from abuse by offering help to victims, families and care workers through targeted education and social care programmes. Thanks to BCT support, the Foundation will be able to launch a new support service within its ‘Good Parent – Good Start’ programme which will focus on good parenting skills by helping counteract the effects of postnatal depression and by strengthening family ties through working with all the family members. Website Website www.fdn.pl Bridgepoint Annual Review 2015 I n v e s t i n g r e s p o n s i b ly I n v e s t i n g r e s p o n s i b ly Gut Hausen Teens and Toddlers Gut Hausen is a small charity founded in 2008 to promote environmental conservation and education, particularly through its work with kindergarten and primary schools. BCT funding is being used to build a new kindergarten outdoor area within a 2.5 hectare site within central Frankfurt. In 2015 we funded the purchase of equipment for the first natural kindergarten in Frankfurt. This has allowed children to explore the site with a mixture of excursions, project work and free play where they are introduced to traditional culture and handicraft techniques such as working and playing with wood, felting and papermaking as well as preparing and cooking the on-site produce such as fruit and vegetables. Teens and Toddlers is a UK charity that seeks to inspire young people to achieve the self-belief, skills and qualifications they need to succeed in education, at work and in life. They achieve this by placing teenagers in nurseries for three hours per week where they mentor a toddler as well as receive life skills coaching. In our final year of support, BCT funded 13 Tomorrow’s Leaders programmes in existing and new boroughs in London, reaching over 100 teenagers. Germany United Kingdom Website www.lebenshilfe-ffm.de/de/ GutHausen/GutHausen.php Website www.teensandtoddlers.org Fryshuset 84 85 Sweden Website Fryshuset is a Swedish charity, identified by our colleagues in Stockholm, which supports some 14,000 young people in Stockholm, Gothenburg and Malmö around three inter-related platforms of education, social projects and leisure interests. In our final phase of support for the project, we have been able to help it host for a third successful year a ‘youth entrepreneurship’ project – Camp Connect, a four-day summer camp outside Stockholm for young adults. This is a forum to educate young adults to become tomorrow’s leaders with lectures and creative workshops with focus on entrepreneurship. Un Orchestre à l’École France www.fryshuset.se Website www.orchestre-ecole.com Bridgepoint Annual Review 2015 Bridgepoint Annual Review 2015 In France we renewed our support for Un Orchestre à l’École (‘OAE’), a non-profit organisation that transforms an entire class in a primary or junior secondary school into an orchestra. OAE, registered by the French Ministry of Education, works in schools across France with underprivileged pupils. Under the scheme, pupils are entrusted with a high-quality instrument and that they are responsible for keeping in good condition that they learn to play individually and as part of a team. In 2015 BCT funded the set-up of eight orchestras in schools throughout France. O u r o ff i c e s o u r o ff i c e s Our offices 86 Frankfurt Istanbul London Neue Mainzer Straße 28 60311 Frankfurt am Main Germany Tel: +49 (0) 69 210 877 0 [email protected] Vişnezade Mahallesi Suleyman Seba Caddesi BJK Plaza no:48 A blok 9.kat D:93-94 Akaretler/Istanbul Turkey Tel: +90 212 310 8252 [email protected] 95 Wigmore Street London W1U 1FB United Kingdom Tel: +44 (0) 20 7034 3500 [email protected] Luxembourg Madrid 2, avenue Charles de Gaulle L-1653 Luxembourg Tel: +352 26 47 56 [email protected] Louis Paul-Dauphin Associate, Bridgepoint Development Capital, Paris Paris C/. 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