An active year for Horizon Capital with 2 New Platform investments, 3 realisations and 23 add on acquisitions.
This time last year UK businesses braced themselves for a year of uncertainty with the outcome of both Brexit and the US presidential election hanging in the balance. Back then, no one could have imagined that a global pandemic would dwarf both, impacting business, government and our daily lives in a way not seen before in our lifetimes.
One example being home schooling which was a niche activity in January 2020 but today it is something every parent has experienced first hand. We are particularly proud of the materials and support our portfolio company Juniper Education made freely available to learners and of Timico’s in providing IT support to children studying at home during the year.
2. New Platforms
Our portfolio companies weren’t alone in rising to the challenge last year presented. In 2020, we completed Horizon Capital 5th and 6th platform investments. In January the £47m acquisition of Sapphire Systems; a provider of enterprise software to mid-sized corporates in the UK and US. As the year drew to a close in December, we committed £22m of equity to Topsource; a provider of employment compliance services. Both investments have already successfully exhibited our high intensity buy and build strategy. Sapphire has completed one US and one UK acquisition and we closed the first acquisition for Topsource simultaneously with our investment. All deals were sourced from our market mapping programme.
3. Realisations
2020 was also an important year for realisations from the 2013 fund Horizon Capital manages. Software-as-a-Service (“SaaS”) businesses with their robust financial profiles and highly visible forward earnings became even more highly sought after and highly rated during the year. We took advantage of this in the last quarter with the sale of both Totalmobile and Style Analytics, realising aggregate returns of over 3x money for our investors. These exits built on our success in the summer with the realisation of Connexas a telematics provider to a larger European consolidator.
23. Add On Acquisitions
New platforms and realisations weren’t the only activity that kept our team busy in 2020. Working remotely for much of the year, we completed 23 add on acquisitions for the portfolio, acquiring over £100m of enterprise value. Juniper Education made its 7th acquisition taking a the business to being one of the leading SaaS software providers to UK Schools whilst Sabio’s acquisition of Anana marked a 5 fold increase in EBITDA since our investment in 2016.
Happy Birthday Horizon Capital
This month, we celebrate our third birthday as a partnership, no champagne sadly, but we feel a collective sense of huge pride as we reflect on our journey together over the past three years. We are privileged to work with talented management teams who, in the face of the adversity of 2020 excelled, continuing to deliver strong growth.
Looking forward as the world emerges from the pandemic and as the UK emerges from Brexit uncertainty, we see a very attractive investment environment. We believe the Digital Economy which is at the heart of our sector focussed investment model will play a critical role in the UK’s economic recovery and we look forward to making new investments and supporting our portfolio companies embrace the very significant opportunity ahead.
