Mercia Asset Management PLC, the regionally focused specialist asset manager has sol Clear Review Limited to Slough-headquartered Advanced Business Software and Solutions Limited, the third largest British software and services company in the UK for a total cash consideration of up to £26 million.
Mercia, which has around £800 million of assets under management, held a four per cent fully diluted direct holding in Clear Review at the date of sale and will receive cash proceeds of £1 million representing a two times return on its investment and a 72% internal rate of return (IRR). In addition to this direct investment return, the sale will also generate an eight times return on Mercia’s EIS managed fund investment cost and a 122 per cent fund IRR.
The company was first backed by Mercia’s managed funds in 2018 and became a direct investment in June 2019.
Clear Review, which was founded by Stuart Hearn, former HR director at Sony, is a software as a service (“SaaS”) tool providing organisations with data and systems to improve performance management. Under Stuart’s leadership the company quickly met its commercial milestones, passing £2 million in annual recurring revenue in December 2019, up 100 per cent from the previous year.
It was was named top of the ‘EU Start Ups to Watch’ list by eu-startups.com in 2019 and has been recognised for its commitment to customer service – winning this year’s TIARA Talent Tech Customer Service Award and Tech ‘Champion of Champions’ Award.
Advanced’s acquisition comes six months after the acquisition of Tikit, a global legal, accounting and professional services software business, from British Telecommunications Group plc (BT), and just days after its acquisition of Mitrefinch, a global workforce management company. It is the fourth transaction since the firm received an investment from funds advised by BC Partners and Vista Equity Partners to accelerate growth in August 2019. The two most recent acquisitions have both been completed during the global pandemic.
Gordon Wilson, CEO of Advanced, said: “Covid-19 has forced over half the UK’s workforce to work from home – something that is likely to continue as our normal – and so the ability for managers to continuously develop and improve their people’s performance remotely is paramount to the success of every organisation. Vital too is that organisations can ensure they have engaged workforces and that their wellbeing is supported. Clear Review’s technology gives managers the tools to do all these things whilst being extremely complementary to our existing Human Capital Management solutions which is an area of priority for us. For both our existing and new customers this acquisition enhances their ability to empower managers to accelerate their talent management strategies.”
Dr Mark Payton, CEO of Mercia Asset Management, said: “Clear Review is now our fifth full cash exit from the direct investment portfolio, coming just three months after we announced the sale of The Native Antigen Company. We have been consistent in our stated objective to both source and exit deals well, and I am pleased that we have been able to again demonstrate our execution of this strategy through another successful exit.
“The team at Clear Review has achieved great things in a relatively short period of time and I am confident that under their new custodian they will continue to disrupt the HR SaaS sector.
“This sale process has been handled entirely virtually, which is testament to our team’s effectiveness in transacting deals even during these complex times.”