BGF exits investment in Miss Group as Perwyn acquires majority position
BGF has successfully exited its investment in fast-growth web hosting company, Miss Group, as financial backing has been secured from private equity investor Perwyn.
Miss Group, which offers services including web hosting, domain registration and VPS to SMEs, received an initial £6.4m from BGF in August 2018. This was followed by a further £13m investment to accelerate its international expansion strategy in 2019. Previously Miss Group also received funding from Harbert European Growth Capital.
Led by CEO Mattias Kaneteg, Miss Group has completed seven acquisitions across Scandinavia, Spain and the US since BGF invested as a minority equity partner. The business has also posted strong organic growth, outpacing competitors across all markets. Revenue has grown from £8m to £25m since BGF’s investment and EBITDA has increased from £2.5m to £11m.
Mattias Kaneteg, Miss Group founder and CEO, said: “When we met BGF, we had ambitious plans for growth and a strategy to add additional complementary acquisitions to our group in geographies where we could see strong potential. We’ve exceeded our own expectations and couldn’t be happier with the support and insight we’ve received through partnering with BGF. As we look ahead to our next chapter with Perwyn, we will continue to play to our strengths in marketing our market-leading proposition to SME customers with a focus on Scandinavia, Spain and the US.”
Pinesh Mehta of BGF’s Manchester office, who will step down from the board of Miss Group, added: “Miss Group is a fantastic example of a tech business which has taken an industry-leading product and proven business model to international markets in order to drive outstanding growth. We believe Manchester and the North West is home to many technology businesses with this potential and we’re keen to back their growth ambitions.”
BGF has backed a number of North West-based technology businesses in recent years, including: fintech business, Planixs; Liverpool-based Sentric Music; and Gaist, which is a roadscape and highways technology company.
Pinesh added: “BGF has delivered an exceptional return on its investment in Miss Group in a relatively short period with an IRR of more than 100%. This is testament to the strength of the partnership and the entrepreneurial drive of the business.”
Andrew Wynn and Mark Blower, Partners at incoming majority investor Perwyn noted: “We have been very impressed by Miss Group’s achievements to date and are delighted to partner up with its visionary founder Mattias Kaneteg on the next stage of the journey. We see that the business has a differentiated offering in attractive market, providing significant scope for further organic growth and continuation of its successful M&A strategy. The investment fits perfectly with Perwyn’s core investment thesis of backing high growth founder-led businesses pursuing international expansion and M&A. We look forward to working with Mattias and the team through these exciting times ahead.”
A team led by Phil Adams at GCA Altium in Manchester advised Miss Group on the deal.
The deal was led for BGF by Pinesh Mehta.
Advisers for the vendors:
· Corporate Finance - GCA Altium (Phil Adams, James Craven, Mark Smith and Phil Chadwick)
· Legal advice - Squire Patton Boggs (Giles Chesher and Matt Canipa)
· Financial and commercial due diligence - EY (Neil Hutt and Steven Kingham)
Advisers for Perwyn:
· Legal advice – Eversheds Sutherland (Robin Skelton, Jonathan Wharam and Russell Naglis)
· Tax structuring advice – PwC (Simon Viner and Isabel Moliz)
· IT due diligence – Digital Pathfinders (Neil McGowan)
BGF was set up in 2011 and has invested more than £2.1bn in over 300 companies, making it the most active investor in the UK.
· BGF is a minority, non-controlling equity partner with a patient outlook on investments, based on shared long-term goals with the management teams it backs.
· BGF invests in growing businesses in the UK and Ireland through its network of 14 offices.
· In 2018, Canada launched its equivalent – the Canadian Business Growth Fund – based on BGF’s funding model, and Australia is now actively exploring the approach as well.
About Miss Group
Founded in 2014, Miss Group is an International Web Hosting Group that offers a range of Hosting related services at favorable prices such as Web Hosting, Domain Registration, VPS, Dedicated Servers, Sitebuilder, SSL-Certificate, SEO Tools, Web Security and Domain Management. Miss Group is also an ICANN-accredited Domain Name registrar via NameISP.