Good morning Eurohubsters, Craig McGlashan here with Tuesday’s Dealflow.
After a slow start to the week we’re starting to see a bit of a pickup in deals again. But first I wanted to chat about cybersecurity in private equity investments.
Securing the deal. As a self-confessed tech fan, I was interested to read about a report by BlueVoyant, a cybersecurity company, that found that 19 percent of the private equity portfolio companies it examined are exposed via ‘zero tolerance findings’ – which BlueVoyant defines as “critical known findings that are easily exploitable by malicious actors and are commonly associated with successful ransomware attacks”.
“When it comes to private equity portfolio companies, we see a wide range of cyber defence postures,” said Dan Vasile, vice president, strategic development at BlueVoyant, in a statement. “Cybersecurity as a subset of risks is sometimes overlooked. This analysis confirms the need to prioritise cyber defence in order to protect portfolio company value. The private equity space is beginning to get on track. However, we must button up the entire process to protect those vulnerable entities, as well as ramping up cyber defence against less easily exploitable but equally damaging threats.”
That chimed with something the head of private equity at one investment firm told me on Friday.
One of that firm’s private equity strategies is investing in cybersecurity – not just to find companies in the sector to add to its portfolio, but to apply those companies’ services to other portfolio companies and so aid the digital transformation across the entire portfolio.
He also noted that cybersecurity is in some ways the industry that can’t stop growing. Every time systems become more secure, hackers get smarter and so need to be defeated again – making it hard to put a cap on growth in the sector.
Recent cybersecurity deals we’ve covered include Bowmark backing Xperience and Thoma Bravo portfolio firm Intel 471 buying SpiderFoot. Not all deals have gone ahead, however. In early September, talks between Thoma Bravo and Darktrace failed to lead to an offer.
Deal management. Sticking with software, this morning Main Capital Partners announced the acquisition of a majority stake in TimePlan Software, a provider of workforce management software.
Aalborg, Denmark-based TimePlan is a workforce management software vendor. The software is modular by design, which according to TimePlan, ensures that the needs of a business are met precisely.
TimePlan serves more than 240 clients and is used in 26 countries throughout Europe.
Main Capital plans to support TimePlan in maintaining its growth momentum by further expanding into adjacent customer segments and broadening the offering to its customers. According to Main, strategic add-on acquisitions will be “an important pillar” of the growth strategy.
“Increasing complexity of labour regulations, evolving and the need to accurately forecast and plan the workforce is an ongoing struggle for many large companies,” said Wessel Ploegmakers, partner at Main Capital Partners, in a statement. “We see that TimePlan has built a powerful yet flexible solution to support leading industry players in their respective segments.”
Lottery. Ontario Teachers’ Pension Plan Board announced that Allwyn, a European lottery operator, has agreed to acquire Camelot UK Lotteries. The acquisition is anticipated to close in Q1 of 2023, subject to regulatory approvals, including from the Gambling Commission.
Based in Watford, England, Camelot UK Lotteries has been the operator of the National Lottery since its launch in 1994. Ontario Teachers’ acquired Camelot in 2010.
Upon completion of the acquisition, Camelot UK Lotteries will become a wholly owned subsidiary of Allwyn. Earlier this year, the Gambling Commission awarded Allwyn Entertainment the licence to operate the National Lottery from February 2024 onwards, known as the ‘fourth licence’.
Insurance play. Ergon Capital announced a partnership with Belgian insurance broker AlliA. As a result, Ergon acquires part of the shares of AlliA, next to the founding Lebon family and management. The Lebon family and AlliA’s management team remain in charge of the daily management of the company.
Roeselare, Belgium-based AlliA offers its insurance brokerage services to corporations, SMEs and entrepreneurs. The company’s insurance offering covers a range of insurance products, including fire, property, liability, work accidents insurance, marine, fleet, employee benefits, credit and cyber.
AlliA intends to accelerate its growth in Belgium, Luxembourg and internationally. Ergon will aid the founding family and management to grow AlliA organically and inorganically, by investing in the company’s service offering, organisation and systems.
That’s it from me – I’ll be back with you tomorrow.