Duck Creek acquired by Vista in $2.6bn transaction

BY Fraser Tennant

In a deal that will see it become a privately held company, intelligent solutions provider Duck Creek Technologies is to be acquired by global investment firm Vista Equity Partners in an all-cash transaction valued at approximately $2.6bn.

Under the terms of the definitive agreement, Duck Creek shareholders will receive $19 per share in cash, which represents a 46 percent premium to Duck Creek’s closing stock price on 6 January 2023.

The merger agreement with Vista Equity Partners was approved following the recommendation of a special committee of the Duck Creek board of directors.

“This transaction is a testament to the value of the Duck Creek platform, the success of our strategy and the strength of our incredible team,” said Michael Jackowski, chief executive of Duck Creek. “Following a deliberate and thoughtful process, the board approved this transaction which delivers a great outcome for Duck Creek’s shareholders, providing them a certain and substantial cash value at an attractive premium.”

The deal terms of the merger agreement include a ‘go-shop’ period expiring 7 February 2023, which allows Duck Creek’s board of directors and its advisers to actively initiate, solicit and consider alternative acquisition proposals from third parties.

Founded in 2000 and headquartered in Boston, Duck Creek provides cloud-based property and casualty insurance solutions to its customers including Berkshire Hathaway Specialty Insurance and American International Group.

“Duck Creek is playing an outsized role in accelerating cloud strategies and unlocking all the advantages they provide this crucial sector of today’s economy,” said Monti Saroya, senior managing director and co-head of Vista’s flagship fund. “Duck Creek’s modern cloud architecture and demonstrated market traction position it to define the next generation of mission-critical technology for P&C insurance.”

The transaction is expected to close in the second quarter of 2023, subject to the satisfaction of customary closing conditions, including approval by Duck Creek’s stockholders and US antitrust clearance.

“Vista has an established track record of partnering with leading enterprise software businesses within the insurance industry and related verticals,” concluded Jeff Wilson, managing director at Vista. “We are excited to work with the Duck Creek team as we look to build on their best-in-class platform and solutions, which serve many of the world’s leading P&C insurance carriers.”

News: Vista to take Duck Creek Technologies private in $2.6 bln deal

BC Partners to acquire Madison Logic from Clarion

BY Fraser Tennant

In a deal that underscores its deep expertise in technology enabled services and digital marketing, international investment company BC Partners is to acquire a majority stake in account-based marketing (ABM) platform Madison Logic from New York based private equity (PE) firm Clarion Capital Partners.

The terms of the deal have not been disclosed.

Established in 1986, BC Partners has played an active role for over three decades in developing the European buyout market. Since its foundation, BC Partners has completed over 124 PE investments in companies with a total enterprise value of over €160bn and is currently investing its eleventh PE buyout fund.

“Madison Logic embodies the key themes that we look for at BC Partners and within the technology sector,” said Raymond Svider, chairman of BC Partners. “It is an industry leader in a secularly growing market with multiple avenues for growth and a strong management team. The business is the ideal platform to invest in this attractive segment of the market.”

Moreover, BC Partners will support the ABM platform management team to continue to provide unsurpassed services, as well as accelerate its growth trajectory with access to additional capital to invest in the business and its technology to further drive organic and inorganic growth through increased technology platform functionality and service delivery. BC Partners will also expand capabilities in new industries, geographies and advertising mediums.

“Madison Logic has grown substantially and established its leadership position in the market,” said Tom O'Regan, chief executive of Madison Logic. “We are thrilled to now continue in the next stage of our very ambitious growth path, and confident that this will unlock significant new growth opportunities across the business.”

With the support of Clarion, Madison Logic has taken market share through rapid organic growth, driven by a highly targeted go-to-market strategy and investments in technology.

“The execution by the Madison Logic team has been nothing short of incredible as they have scaled the company to become a global leader in account based marketing," said David Ragins, a managing director at Clarion. “It has been a pleasure being part of such a great company and we wish the team continued success with their new partner.”

The transaction is subject to customary regulatory and antitrust approvals.

Mr Syider concluded: “Consistent with our ‘owner-operator’ mindset, we are excited to partner with Madison Logic to execute their strategy and support them in further developing their technology and services offerings.”

News: BC Partners to acquire account-based marketing firm Madison Logic

Nordic Capital exits The Binding Site in $2.6bn deal

BY Richard Summerfield

European private equity firm Nordic Capital has agreed to sell The Binding Site Group, a global leader in specialty diagnostics, to Thermo Fisher Scientific Inc., in an all-cash transaction valued at $2.6bn.

The transaction, which is expected to be completed in the first half of 2023, is subject to customary closing conditions, including regulatory approvals. Upon completion, The Binding Site will become part of Thermo Fisher’s specialty diagnostics segment and is expected to be accretive to adjusted earnings per share by $0.07 for the first full year of ownership.

The Binding Site, which is headquartered in Birmingham, UK, has more than 1100 employees globally and is an active and influential contributor to the broader scientific community. The company is an established leader in a fast-growing segment in which patient care has shifted toward early diagnosis and monitoring via regular testing. Its business has been growing approximately 10 percent annually and is on track to deliver more than $220m of revenue in 2022.

“This transaction perfectly aligns with our Mission and is an exciting addition to our existing specialty diagnostic offerings,” said Marc N. Casper, chairman, president and chief executive of Thermo Fisher. “With extensive expertise and a large and dedicated installed base in cancer diagnostics, The Binding Site will further enhance our specialty diagnostics portfolio. The Binding Site is extremely well-respected by researchers and clinicians alike for its pioneering diagnosis and monitoring solutions for multiple myeloma. We also know early diagnosis and well-informed treatment decisions for multiple myeloma can make a significant difference in patient outcomes. We are excited by the opportunity to enable further innovation in this area for the benefit of patients and look forward to welcoming The Binding Site team to Thermo Fisher.”

“This announcement marks the beginning of a new and exciting chapter for The Binding Site and is a testament to our team’s singular commitment to improving patient lives through the development and delivery of innovative solutions,” said Stefan Wolf, chief executive of The Binding Site. “The Binding Site has long been at the forefront of medical diagnostics and by joining the world leader in serving science, we will be even better positioned to accelerate scientific discovery and expand our product offering for the benefit of our colleagues, customers and, most importantly, the patients we serve.”

“We are proud to have partnered with The Binding Site,” said Dr Raj Shah, a partner and head of healthcare at Nordic Capital Advisors, and Jonas Agnblad, a partner at Nordic Capital Advisors and a board member of The Binding Site. “Their cutting-edge technology and innovative specialty diagnostic solutions improve millions of patient lives globally. During Nordic Capital’s ownership the company has experienced strong growth and transformation, achieved by a dedicated focus on R&D investment, commercial focus and global expansion. We are grateful to The Binding Site team, for their dedication and for building strong scientific foundations which support the changing needs of patients and clinicians. This transaction marks the culmination of a very successful partnership, a successful outcome for Nordic Capital’s investors and the start of an exciting next phase for The Binding Site.”

Nordic Capital has been the majority owner of The Binding Site since 2011 when it completed the acquisition together with Five Arrows.

News: Thermo Fisher Scientific to Acquire The Binding Site Group

Cyber security: recession proof?

BY Richard Summerfield

Amid ongoing economic and geopolitical challenges, the cyber security sector remains strong, according to a new report from ICON Corporate Finance.

Thus far, the sector is proving recession-proof and remains a growth area, defying current troubling macroeconomic headwinds. As such, the cyber security sector is leading the way for M&A and fundraising activity in 2022, with deal activity for Q1-Q3 up 60 percent compared to 2020 for M&A and up 22 percent for fundraising.

The report notes that going forward, enterprises must recognise that they must continue investing in cyber defences regardless to protect against an increasingly sophisticated threat landscape, and because of significant geopolitical and economic uncertainty. This, in turn, is acting as a catalyst for M&A and fundraising deal activity.

According to ICON, the first three quarters of 2022 saw 353 cyber security M&A deals, with a total value of $125bn. As a result, the sector is on track to surpass pre-coronavirus (COVID-19) levels. With vendor platform consolidation, largely backed by private equity, being a chief driver behind the sustained deal activity.

Fundraising activity also remained in line with long-term trends, with $15.4bn of venture capital money invested in the sector globally across 572 deals in the first three quarters of the year.

“Enterprises recognise that they must continue hardening their security defences to keep above water in the arms race between good and bad,” said Florian Depner, director of ICON Corporate Finance. “Cybersecurity is mission-critical and companies have no choice but to keep investing given the uplift in malicious activity, and state-backed attacks.

“We also anticipate that Private Equity will continue injecting much-needed growth fuel into later-stage scale-up companies; a trend demonstrated by the BlackRock-backed $250m (£221.7m) investment in Swiss-based storage management and personal backup services provider Acronis.

“These factors, combined with Private Equity backing buy-and-build strategies and vendor platform consolidation, and the fact that the three-year cyber security index for public sector stocks rose 61.5%, while NASDAQ rose just 35.5%, makes cybersecurity players undeniably desirable.”

Going forward, ICON predicts that consolidation will continue at pace as trade and PE acquirers are ready to capitalise on market opportunities.

Report: Cybersecurity Sector Update – Q3 2022

EIG buys Tokyo Gas’ Australian LNG portfolio for $2.15bn

BY Fraser Tennant

Marking the launch of a strategy to build a diversified, global integrated liquified natural gas (LNG) company, MidOcean Energy, a unit of private equity firm EIG, is to buy four Australian LNG projects from Tokyo Gas Co., Ltd in a transaction valued at $2.15bn.

The acquisition will see EIG acquire Tokyo Gas’ interests in Gorgon LNG, Ichthys LNG, Pluto LNG and Queensland Curtis LNG – integrated projects that span Australia’s western and eastern seaboard and are major suppliers of LNG to Asia.

The Tokyo Gas portfolio is expected to generate approximately 1 million tonnes per annum of LNG net to MidOcean, production that is underpinned by long-life reserves and a globally competitive cost structure.

The transaction is also in line with the Tokyo Gas Group’s Management Vision, ‘Compass 2030’, where Tokyo Gas continues to demonstrate leadership in the transition to net-zero CO2 emissions.

“Since 2003, our company has participated in five Australian LNG projects and expanded its business holdings in upstream LNG interests,” said Tokyo Gas in a statement. “Four of those projects, excluding the Darwin LNG project, will be transferred to MidOcean. “Under the Compass Action plan, our company will review its asset portfolio in order to allocate resources to growth areas.”

Tokyo Gas, Japan's biggest city gas supplier, did not disclose the terms of the transaction.

“The launch of MidOcean reflects our deep belief in LNG as a critical enabler of the energy transition and the growing importance of LNG as a geopolitically strategic energy resource,” said Blair Thomas, chairman and chief executive of EIG. “We believe this transaction provides MidOcean with a foundational portfolio of cost-advantaged integrated LNG assets in a low-risk jurisdiction, ideally positioned to supply key customers in Japan, Asia and across the globe for decades to come.”

During its 40-year history, EIG has committed over $41.5bn to the energy sector through over 387 projects or companies in 38 countries on six continents. EIG’s clients include many of the leading pension plans, insurance companies, endowments, foundations and sovereign wealth funds in the US, Asia and Europe.

The transaction is expected to close in the first half of 2023, subject to customary closing conditions, including Australian regulatory approvals.

De la Rey Venter, chief executive of MidOcean, concluded: “We see a number of opportunities to further expand MidOcean’s position in supplying LNG markets around the world and look forward to working with our new partners and customers.”

News: EIG unit to buy Tokyo Gas's stakes in Australian LNG projects for $2.15 billion