The latest IT venture capital divestments

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Integral service around a transaction
BY : Diego GutiérrezFebruary Mon, 2019

Throughout 2018 We saw how a number of private equity IT specialists were being sold and, moreover, in significant quantities. We did not want to be left behind and we have investigated these operations, presenting in this post the 5 most relevant sales. We are talking about divestments totalling more than 2.5 billion euros.

Recent Venture Capital Divestments in the Information Technology (IT) Sector

Recent Venture Capital Divestments in the Information Technology (IT) Sector

In the following, we analyse from our field of corporate finance the last 5 company sales IT venture capital (Source: Capital&Corporate):

1. Ufinet

In one of the sales processes most competitive of the yearCinven sold Spanish fibre operator Ufinet Telecom Holding, the former telecoms business of Gas Natural. This was its first divestment in Spain since the UK private equity firm opened an office in 2015.

The transaction was signed on 11 May 2018, whereby Cinven charged 2 billion eurosThis amount represents a capital gain of 1.1 billion in only four years. This sale was the largest IT venture capital operation in Spain in 2018.

Ufinet is a neutral telecommunications operator, providing services to other operators and all types of large customers. Its origins date back to 1998, when the former Unión Fenosa created the company from a small telecommunications department. Since 2014, the company doubled its Ebitda to 140 million euros.

2. iHealth

French insurer CNP Assurances has taken control of iHealth in an operation that Spanish start-up valued at 50 million euros.

iSalud, founded in 2010 as the first health insurance comparison portal, has a volume of more than 45 million euros in premiums managed and a team of 110 people.

The operation was carried out by means of a acquisition of shares and a capital increaseThe deal was the largest transaction in Spain in the insurtech sector. It also implied an implied multiple of more than 10x for Inveready Technology Investment Group, the venture capital manager that supported the company from its inception using a venture debt instrument.

In addition, it also involved the exit of another investor, Mediaset, which entered the capital in 2015. As reported by C & C, the 90% of the capital was in the hands of the founders and the remaining 10% from Inveready and Mediaset.

3. Adman Media

Founded in 2010 and headquartered in Barcelona, Adman Media has developed the world's largest video delivery platform (SSP) for native Spanish-speaking formats in Europe and Latin America. This solution enables seamless distribution of advertisers' video content through high-quality publishers to achieve a high degree of success with audiences and maximise publishers' revenues.

In April we learned that Canadian technology company AcuityAds had acquired Adman Media's 100% for 17.5 million euros. That amount was divided on the one hand into 12 million disbursed in cash and an earn out of up to 5.5 million subject to the results obtained by the Spanish company in the second quarter of the year.

The operation meant the exit of Inveready from Adman Media's shareholding, which transferred its stake in the company, close to 30%, to the American company.

4. Advance Medical

Advance Medical is one of the world's leading providers of medical second medical opinion to patients through experts in all major specialties. The Spanish company employs more than 800 employees worldwide, including 400 doctors and nurses, who collaborate with a network of more than 50,000 healthcare experts. Its turnover amounted to €48m in 2016 (last year for which data is available), with a profit of €1.41m.

In July Summit Partners exited the shareholding of Advance Medical after sell its minority stake in the firm to the US company Teladoc. The amount of the transaction amounted to 301 millionof which 250 were paid in cash and 51 in Teladoc shares.

Summit Partners' divestment came just two months after its entry into the Catalan company. In April, the US fund took a minority stake in Advance Medical, with the intention of support its next phase of growth 40 million.

5. AlienVault

Founded in 2007 and headquartered in San Mateo (California), AlienVault is a developer of commercial and open source solutions for managing cyber attacks. One of its best-known products is Open Threat Exchange (OTX), a free community-based security threat response platform. The firm closed 2017 very positively and maintains a year-on-year revenue growth of more than 50%.

In September, we were informed that Adara Ventures Partners had successfully divested AlienVault, which had been acquired by the US-based AT&T for a sum in excess of 500 million.

According to C&C, Adara described the deal as "one of the most significant venture capital operations anchored in the Spanish innovation ecosystem and with a large international footprint".

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