ANNUAL REVIEW 2016 - CONNECT TO PERMIRA, CONNECT TO GROW TH
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A NNUA L RE V IE W 2016 CONNEC T TO PERMIR A , CONNEC T TO GROW TH
BUYING WELL
2016 NEW INVESTMENTS
€2.2bn
An organic personal care
brand in Japan
Equity invested
Largest e-commerce player A provider of integrated HR software
and internet brand in Poland solutions and outsourcing
A fund administration and An omnichannel fashion retail
corporate services provider business for private members
One of Italy’s largest pet care An Asian leader in outsourced
retail chains corporate services
Find out more about the Permira funds’ investments on page 7
SELLING WELL
2016 DIVESTMENTS
€4.2bn
Divested
A provider of online genealogy A provider of advanced automated
material handling solutions
A supplier of minimally invasive A leading provider of products
surgical delivery systems and services to the over 50s
Find out more about the Permira funds’ divestments on page 8
Permira at a glance
The Permira funds have delivered market-leading returns for our investors for over
30 years by partnering with more than 200 ambitious businesses to support their
growth. We are proud to work closely with exceptional management teams to help
them solve complex issues. By providing patient capital, board support and access
to our networks, we help transform good businesses into great global leaders.
MORE THAN 30 YEARS’ ACROSS OUR
EXPERIENCE GLOBAL PLATFORM
Permira was a pioneer in European We have more than 240 people in
private equity. Since 1985, the Permira 14 offices across Europe, the US and Asia.
funds have made over 200 investments. Our teams help companies realise their
global growth ambitions, find acquisition
targets, attract new management and
develop strategic relationships.
30+
Years
14
Offices
200+
Investments
28
Partners
240+
Employees
€32bn
Funds raised
PARTNERING WITH TO DRIVE IN FIVE
MANAGEMENT GROWTH SECTORS
We partner with world-class We focus on companies with significant The Permira funds invest in companies
management teams to unlock the potential to grow and become global across five sectors. Our teams look beyond
full potential of the companies in industry leaders. This growth is the core the macro to identify sub-sectors with
which the Permira funds invest. driver of returns. significant underlying growth potential.
Equity invested since inception:
Consumer
Long term €8.3bn1
Average 5-year investment period
17% Financial Services
Year-on-year portfolio valuation growth €2.7bn2
Shared vision 16% Healthcare
Mutually agreed business plan
& financial targets
P5 portfolio EBITDA growth c.€900m3
12% Industrials
P5 portfolio sales growth €4.4bn4
Partnership
Strategic partner for management
constructive board members to Technology
support key decisions
€8.0bn5
1 As at 31 March 2017.
2 As at 31 March 2017. Includes Tricor which completed in April 2017 and Alter Domus which completed in May 2017.
3 As at 31 March 2017. Includes LSNE which completed in April 2017.
4 As at 31 March 2017. Includes DiversiTech which signed in April 2017.
5 As at 31 March 2017.
PERMIRA ANNUAL REVIEW 2016 1
WHO WE ARE
Contents
2016: A year in review SECTION 1
WHO WE ARE
1.
WHO WE ARE
2016: A year in review 2
Permira combines a 30+ year track record, long-standing presence
in the world’s major markets and deep domain expertise across five
sectors. This is what enables us to help management teams grow
ambitious companies. This strategy has continued to deliver great
success in 2016. SECTION 2
S E L L IN G W E L L
BU Y IN G &
2.
BUYING & SELLING WELL
Some of our achievements in 2016 include: Intelligrated case study 4
Investing well 6
New investments 7
Selling well 8
2016 €4.1bn SECTION 3
D R I V E G ROW T H
PA RT N E R IN G TO
3.
PARTNERING TO
DRIVE GROWTH
Opened Shanghai office Returned to investors Magento case study 10
Partnering to drive growth 12
Portfolio group team 15
€7.5bn €1.1bn
SECTION 4
S EC TO R FO C US
4.
SECTOR FOCUS
Allegro case study 16
Consumer 18
Financial Services 22
Raised for Permira VI Raised for direct lending and Healthcare 26
structured credit funds for PDM Industrials 30
Technology 34
SECTION 5
PDM
5.
PDM
Eaton House Group
case study 38
PDM Q&A 40
ESG approach 44
CLEAN case study 45
SECTION 6
R E S P O N SIB LY
IN V E S T IN G
6.
INVESTING RESPONSIBLY
Dr. Martens case study 46
ESG approach 48
Intelligrated case study 52
Teraco case study 53
SECTION 7
CO N TAC T US
7.
CONTACT US
Our offices 54
Disclaimers 56
AT A
GLANCE
2
2016: A year in review
The event-driven volatility that we witnessed throughout 2016
continues into 2017. In addition to the obvious risks involved with
operating in volatile markets, valuations of both public and private
companies are near historic peaks, making it even more important
to identify and back the right companies from the outset.
Investment conviction Celebrating a decade of Investing in our people to make
in uncertain markets Permira Debt Managers the most of future opportunities
Permira thrives on complexity. Our sector It has been 10 years since we launched PDM, We are stepping up investment in our
teams look ‘beyond the macro’ to identify and we are very pleased by the progress made talent platform, given that our people
pockets of sustainable growth. Over the and the returns delivered over that time. are the powerhouse of our business.
last year, the Permira funds have acquired The PDM funds have invested c.€4 billion In the past year, we have welcomed
a diverse range of businesses, including of capital in c.100 businesses, giving both 30 new people to the team.
Allegro, Alter Domus, Arcaplanet, John investors and companies a very high level of
We have also invested further to grow
Master Organics, P&I, Schustermann confidence in their ability to deliver. In 2016,
our Portfolio group to a 10-strong team,
& Borenstein and Tricor. PDM continued to grow, raising €1.1 billion for
maximising our ability to support our
direct lending and structured credit funds,
Using the insights gained from being one of management teams in delivering their
and making 11 new investments.
private equity’s leading technology investors, ambitious growth strategies.
we also ensure that the Permira funds'
portfolio is on the right side of disruptive
technology shifts.
This year saw the exit of the funds' partnership
with Intelligrated which benefited from the
enormous growth in e-commerce in recent years.
By responding to this in the right way and at the
right time, the business was sold last summer for
over five times the cost of the original investment.
Permira thrives on complexity.
Our sector teams look ‘beyond
the macro’ to identify pockets
of sustainable growth.
KURT BJÖRKLUND
CO-MANAGING PARTNER
KURT BJÖRKLUND
CO-MANAGING
PARTNER
PERMIRA ANNUAL REVIEW 2016 3
WHO WE ARE
€2.2bn
WHO WE ARE
1.
Equity invested in 2016
S E L L IN G W E L L
BU Y IN G &
2.
Building strong investor relationships A responsible, sustainable approach
to investing
The ability to build long-term, mutually
beneficial relationships with our investors is We were one of the first large investment
The overall economic outlook for 2017
central to what we do. We continue to invest firms to embed ESG considerations into our
is positive, with indicators suggesting
in our team and infrastructure so that we decision-making processes. As long-term
D R I V E G ROW T H
PA RT N E R IN G TO
3.
that average global growth will
can meet the needs and expectations of our investors, the sustainability of the companies
investors around the world. It is through these that the Permira funds back is of crucial continue at the upper end of what
strong relationships that we were able to close importance, so it is sound business sense to we have seen over the past five years.
Permira VI at €7.5 billion. consider the wider non-financial context in
TOM LISTER
which they operate. CO-MANAGING PARTNER
Looking ahead to identify key
In some of the Permira funds’ investments we
growth markets
have gone further, actively backing companies
The overall economic outlook for 2017 is that provide solutions to long-term sustainability
S EC TO R FO C US
4.
positive, with indicators suggesting that global issues. Netafim, a global leader in drip irrigation,
growth will continue at the upper end of what is revolutionising the ability of farmers around
we have seen over the past five years. the world to increase the yield from their land
while using less water. Pharmaq, a highly
We continue to see strong deal-flow in Silicon
successful former portfolio company, provides
Valley, where we are increasingly recognised
health solutions to fish farms, helping to
as one of the few players to combine a local
alleviate the strains on marine ecosystems
presence with a global office network and
as ever-expanding populations eat more fish.
the cross-sector expertise that is becoming
PDM
5.
ever more relevant in technology transactions. We believe that our combination of 30+ years
accumulated sector knowledge, our clear
More attractive opportunities are also
strategy and our cohesive culture are the basis
emerging in Asian markets. Over the last few
of Permira’s competitive advantage. This
years, we’ve grown our investment team here
combination enables us to confidently take
and in 2016 opened a new office in Shanghai.
a view on sector trends and the Permira funds
New investments in Tricor and John Masters
to invest with conviction behind the companies
Organics are good examples of opportunities
best placed to exploit those trends globally.
we are finding in the region.
R E S P O N SIB LY
IN V E S T IN G
6.
TOM LISTER
CO-MANAGING
PARTNER
CO N TAC T US
7.
4
INDUSTRIALS
|
COUNTRY: US ACQUIRED: 2012 EXIT: 2016 |
Intelligrated is a leading North American-based provider of
advanced automation and fulfilment solutions. Its systems
drive productivity for e-commerce companies, retailers,
manufacturers and the parcel industry. The company was
sold in 2016 after four years in the Permira funds portfolio.
TOGETHER WE ACHIEVED
ore than 300% growth in
M S ignificant enhancement
the sales pipeline and over of software capabilities
90% revenue growth and aftermarket
ajor new customer wins,
M E xpansion into emerging
including UPS, Amazon, markets
USPS, Nordstrom, Walgreens
and Tesla
THIS WAS ACCOMPLISHED BY
More than tripling R&D E stablishing a local presence
investment in new systems in Brazil and China, which
and capabilities, including in are deep consumer markets
automated storage/retrieval and still in the early days of
systems, a full parcel solution e-commerce growth
to enter the high-growth
ompleting three acquisitions,
C
global parcel market and
including two small software
robotic solutions
businesses and the acquisition
S trategic investments in of United Sortation Solutions,
software products and a supplier of specialised
capabilities and in building products to Intelligrated and
a dedicated aftermarket a key supplier to the US Postal
sales force Service, further extending
Intelligrated’s capabilities
S trengthening the leadership
in the parcel segment
team with key hires in software,
aftermarket and sales
Intelligrated is a far better company today than it was four
years ago and Permira deserves a tremendous amount of
credit for that.
CHRIS COLE, INTELLIGRATED, CEO AND PRESIDENT
3 >90% 120%
Acquisitions Revenue EBITDA
growth growth
See more on our sectors p17
PERMIRA ANNUAL REVIEW 2016 5
BUYING & SELLING WELL
2
WHO WE ARE
1.
BUYING &
SELLING WELL
SECTION 2
S E L L IN G W E L L
BU Y IN G &
2.
BUYING & SELLING WELL
Intelligrated case study 4
Investing well 6
New investments 7
Selling well 8
D R I V E G ROW T H
PA RT N E R IN G TO
3.
S EC TO R FO C US
4.
PDM
5.
R E S P O N SIB LY
IN V E S T IN G
6.
CO N TAC T US
7.
6
Investing well
Permira’s strategy is designed to identify investment
opportunities in sectors that have the potential
for long-term growth irrespective of trends in the
wider economy.
What we look for:
The DNA of a Permira funds investment.
Our sector teams identify attractive sub-sectors that benefit from strong underlying
growth trends and then begin detailed analysis of the most attractive companies
operating in that space. At a micro level we then undertake detailed due diligence
on the company, its management and its potential for significant expansion.
G ROW T H
SU B -S EC TO R
P R IO R ACC E SS O P P O R T U NI T Y
TO T H E FO R R A PID
O P P O R T U NI T Y E X PA N SIO N
MU LT IP L E
WO R L D - C L A SS
VA LU E C R E AT IO N
M A N AG EM E N T
LEVERSPERMIRA ANNUAL REVIEW 2016 7
BUYING & SELLING WELL
New investments
WHO WE ARE
1.
The Permira funds enjoyed a strong year in 2016 in €2.2bn
terms of both new investments and portfolio company
Equity invested
divestments. The funds made the following investments in 2016
in the year.
S E L L IN G W E L L
BU Y IN G &
2.
INVESTMENT TRANSACTION
COMPANY FUND SECTOR DATE SIZE INVESTMENT CASE
P5
May 2016
€361m –– Driving growth through a combination of rapid store
roll-out, consolidation of a highly fragmented market
and optimisation of in-store performance
D R I V E G ROW T H
PA RT N E R IN G TO
3.
One of Italy’s largest pet care
retail chains
P5
June 2016
€321m –– Creating value through further store roll-out in Japan,
accelerated new product development and an enhanced
retail marketing strategy
An organic personal care
brand in Japan
S EC TO R FO C US
4.
P5
November
2016
€903m –– Building a strong platform for consolidation of the
relatively fragmented market in this space in Germany
and across Europe
A provider of integrated HR software
solutions and outsourcing
P5
March 2017
€713m –– Using multiple levers to drive growth, including pricing
and packaging optimisation, customer segmentation
PDM
5.
and cross-border selling
An Asian leader in outsourced
corporate services
P6
January
2017
€3.1bn –– Improving the general ecosystem to increase conversion
and average basket size, and enhancing user experience
for both buyers and sellers
Largest e-commerce player and
internet brand in Poland
R E S P O N SIB LY
IN V E S T IN G
6.
P6
January
2017
€730m –– Increasing monetisation of existing customers and
targeting new customers through use of big data analytics,
pricing, CRM and marketing automation technologies
An omnichannel fashion retail
business for private members
P6
April 2017
€527m –– Accelerating international expansion, with a particular
focus on the US
A fund administration and
corporate services provider
CO N TAC T US
7.8
Selling well
The Permira funds completed the following
divestments in the year.
€4.2bn
2016 proceeds
REALISATION REALISATION GROSS
COMPANY FUND SECTOR DATE TYPE TRANSACTION OVERVIEW MULTIPLE
December Partially realised –– Sale of 35% of shares to Hillhouse Capital, Not
P5 2016 a global investment management firm with Disclosed
a strong presence in Asia
Carve-out of eBay’s open –– 59% stake (on an undiluted basis) retained
source and enterprise by the fund
e-commerce platform
March 2017 Partially realised –– Proceeds received from Tokyo Stock Exchange Not
P4 IPO Disclosed
–– 21% stake in the company retained
A market-leading 'Kaiten'
sushi restaurant chain
operator in Japan
P4
May 2016/
October 2016
Partially realised –– Partial exit to Silverlake Partners, GIC and
Spectrum Equity 3.1x
A provider of online –– 7% stake in the business retained by the fund
genealogy –– Further proceeds received following a
refinancing in October 2016
P4
December
2016
Fully realised
Trade sale
–– 5.5 million common shares of Platform sold, fully
realising the investment in December 2016 1.6x
Global crop protection
specialist
P4
April
2016
Fully realised
Trade sale
–– Sale to TE Connectivity, a US-headquartered
corporate buyer 3.3x
Supplier of minimally
invasive surgical
delivery devices
P4
March/June/
July 2016
Fully realised
Trade sale
–– Disposal, by three block trades, of the fund’s
remaining shares in NXP, fully realising 1.1x
the investment
A global leader
in embedded
processing solutionsPERMIRA ANNUAL REVIEW 2016 9
BUYING & SELLING WELL
WHO WE ARE
1.
S E L L IN G W E L L
BU Y IN G &
2.
REALISATION REALISATION GROSS
COMPANY FUND SECTOR DATE TYPE TRANSACTION OVERVIEW MULTIPLE
September/ Partially realised –– Partial sale to Hellman & Friedman in Not
P4 December September 2016 Disclosed
2016 –– Further proceeds generated in December 2016
D R I V E G ROW T H
PA RT N E R IN G TO
3.
A global leader in contact through full redemption of the preferred equity
centre software security, following the acquisition of Interactive
Intelligence and concurrent refinancing
–– 22% equity stake in the combined entity
retained by the fund
P4
August 2016 Fully realised
Trade sale
–– Sale to Honeywell, a US-headquartered
corporate buyer 5.2x
A provider of high-speed
automated material
S EC TO R FO C US
4.
handling solutions
PE3
April 2016 Fully realised
IPO
–– Disposal of the fund’s remaining shares
in Saga, fully realising the investment 1.6x
A leading UK provider
of products and services
to the over 50s
PDM
5.
PE3
December
2016
Fully realised
Secondary buyout
–– Sale to CVC Capital Partners
0.1x
An Italian gaming
operator
PE3
May 2017 Fully realised
IPO
–– Proceeds received following listing
on the Madrid Stock Exchange 0.4x
A Spanish home delivery
R E S P O N SIB LY
IN V E S T IN G
6.
pizza business
CO N TAC T US
7.10
TECHNOLOGY
| |
COUNTRY: US ACQUIRED: 2015 PARTIAL EXIT: 2017
Magento is a leading provider of omnichannel commerce
solutions to retailers, brands and branded manufacturers
across retail B2C and B2B industries.
THE INVESTMENT STRATEGY
o enhance Magento’s go-to-
T the changing needs of global
market strategy and continue wholesalers, manufacturers
Magento’s product leadership and retailers
o invest in Magento’s Retail
T o bolster growth and market
T
Innovations and omnichannel position, where needed,
capabilities in order to meet through strategic acquisitions
MILESTONES TO DATE
S ignificant carve-out from S upported the acquisitions
former parent eBay completed of Schopial (social commerce
with minimal distraction business that helps merchants
allowing management to focus sell products on platforms
on the value creation plan including Facebook), RJ Metrics
(analytics software provider for
uilt-out core management
B
e-commerce companies) and
team: SVP Strategy & Growth,
Bluefoot CMS (a set of tools
VP of Global Sales, CIO, Head
that will facilitate the Magento
of Strategy, Senior Director
page building process)
of Payments
I ntroduced a strategic
eveloping stand-alone
D
investor, Hillhouse Capital,
systems and services
which recently invested
rganic and inorganic
O $250 million in the business
initiatives in progress,
including pricing optimisation
and improved ecosystem
monetisation
#1 250k $50bn
E-commerce Websites Gross
platform merchandise
volume
See more on our sectors p17PERMIRA ANNUAL REVIEW 2016 11
PARTNERING TO DRIVE GROWTH
3
WHO WE ARE
1.
PARTNERING TO
DRIVE GROW TH
S E L L IN G W E L L
BU Y IN G &
2.
SECTION 3
D R I V E G ROW T H
PA RT N E R IN G TO
3.
PARTNERING TO DRIVE GROWTH
Magento case study 10
Partnering to drive growth 12
Portfolio group team 15
S EC TO R FO C US
4.
PDM
5.
R E S P O N SIB LY
IN V E S T IN G
6.
CO N TAC T US
7.12
Partnering to drive growth
The Portfolio group is a dedicated team with diverse operational
backgrounds that provides specific functional expertise to help
management teams build better, stronger businesses.
Supporting management teams We value and promote transparency – it is One important area of focus for us is
to create value fundamental to forming and executing the Environmental, Social and Governance
plan. Frank, open and frequent dialogue (‘ESG’). Adinah Shackleton (Head of ESG)
We first get involved in the due diligence
with the management teams is critical. This helps to ensure that ESG matters are
phase, long before the funds make an
allows us to get the information that we need considered at every stage of the process,
investment. That's when we work to uncover
quickly, to identify and resolve issues and to and that good practice in this area helps
the quality of the business and build a value
support the people who are responsible for to drive operational efficiencies.
creation plan designed to unleash maximum
the various initiatives.
potential. Assuming our funds go on to make In addition to our experienced, global team,
the investment, our role then is to support we have access to an extensive network of
A growing team of experts
management teams to implement and senior advisers and consultants across all
execute on the plan to drive sustainable We are a relatively small group built around five sectors, some of whom sit on the board
growth across the company. the Permira funds' investment strategy and of a number of the funds' portfolio companies.
the practical needs of portfolio company This could mean working closely with them
It is our job to ensure that the plan is embedded
management teams. We have built a team during the initial set-up process at a portfolio
in the company with as little disruption as possible.
that reflects these priorities and mirrors the company, or simply recommending them
This is a crucial inflexion point in their growth
wider firm structure, with 10 individuals in key to a management team member.
journey and can be unsettling. We support
geographies, sectors and functional areas
management teams to set out a trajectory, get
to proactively add value to the businesses
the right reporting and processes in place, and
we back.
create the momentum for growth, providing a
roadmap. It is then down to the management
team to drive the plan forward.
Frank, open and frequent dialogue with
the management teams is critical. This
allows us to get the information that
we need quickly, to identify and resolve
issues and to support the people who
are responsible for the various initiatives.
OLIVER STEIL
PARTNER,
HEAD OF PORTFOLIO GROUP
OLIVER STEIL
PARTNER,
HEAD OF PORTFOLIO GROUPPERMIRA ANNUAL REVIEW 2016 13
PARTNERING TO DRIVE GROWTH
WHO WE ARE
1.
S E L L IN G W E L L
BU Y IN G &
2.
We have made significant progress over the back Magento – it was a wonderful software The Portfolio group also played a key role
past 18 months recruiting the right blend business with a massive customer base and in supporting the management team to
of skills and experience for Permira and leading positions in Europe and the US. But create value at Vacalians Group (P5, 2015),
formalising the process. eBay was looking to sell a number of other a leading European player in outdoor holidays.
companies that didn’t fit our profile and we We formed an investment thesis based on
The Portfolio group in action thus spent a lot of time engineering a team- an attractive underlying market with resilient
D R I V E G ROW T H
PA RT N E R IN G TO
3.
up to allow the Permira funds to only acquire growth. The plan sought to upgrade the overall
The Portfolio group has helped to create
what we wanted, including getting the assets customer experience and introduce a premium
strategic value at every stage of the process,
that became Pepperjam. Time was tight, range with additional services. Following a
from due diligence to the 100-day value
we had only a few weeks to carry our due successful trial, this coming season will see the
creation plan and in major strategic projects
diligence and structure the entire enterprise roll-out of high-end vacation offerings across
throughout the lifetime of the investment.
– an extremely complex process involving a number of target destinations.
A great example of how our work at an early separating multiple businesses from a division
stage in a transaction can enable management that was itself about to be carved out of Knowledge sharing
S EC TO R FO C US
4.
to focus on running the company is Magento eBay. Crucially, we went through this process
We also facilitate best practice sharing
(P5, 2015), an omnichannel commerce without heavily burdening CEO Mark Lavelle,
through a series of portfolio conferences.
solutions provider. Our Technology team to give him the capacity to continue with his
These allow for knowledge-sharing among
had been building a relationship with eBay own challenge of running the business.
the senior team members from specific
for some time and tracked the ownership of
functional areas who are invited to hear
Magento for years. We knew we wanted to
about the latest developments in their field,
and to share expertise.
PDM
5.
How we operate
Permira operates a matrix structure where sector
teams, our local office network and functional specialists
collaborate seamlessly across our global platform.
SECTOR
R E S P O N SIB LY
IN V E S T IN G
6.
TEAMS
3
CONTINENTS
OFFICE PORTFOLIO INDUSTRY
NETWORK INSIGHTS
GROUP
14
CO N TAC T US
7.
OFFICES FINANCE LEGAL STRUCTURE
INTERNAL
EXPERTS14
Partnering to drive growth continued
Systemising the Permira approach –
Refined approach to repeatable value creation
The Permira approach is founded upon five core value creation
topics, each of which is underpinned by multiple initiatives.
Each value creation plan is designed and tailored to suit the
specific portfolio company situation.
2010
S T R AT EGY 2010M A R K E T IN G 2011 SALES 2012 2015
E F F IC IE N T
2.0 E XC E L L E N C E R A M P- U P O P E R AT IO N S
Formal ESG Permira ESG Permira Permira Permira hired
framework launched Group established adopted won BVCA first Head of
Add-on acquisitions Principles forDirect sales excellence
Brand & value proposition Responsible ESG,
Footprint Adinah
optimisation
Responsible Investment Shackleton
Transformational M&A New product roadmap
Investment Wholesale distributor/
Award
dealer management
Lean production
International expansion Pricing & packaging Supply chain
Retail roll-out management
E-commerce step-up Digital marketing
Retail LfL initiatives Service delivery
Use of big data optimisation
Engineering-to-sales
CLTV management Overhead cost reduction
Customer experience
management
P L AT FO R M C R E AT IO N
Corporate carve-out Management upgrade Reporting & incentives
Post merger integration Employee engagement IT/ERP system scale-upPERMIRA ANNUAL REVIEW 2016 15
PARTNERING TO DRIVE GROWTH
Portfolio group team
WHO WE ARE
1.
S E L L IN G W E L L
BU Y IN G &
2.
D R I V E G ROW T H
PA RT N E R IN G TO
3.
RICCARDO BASILE ZILIA D’MELLO DOMINIQUE FRIEDRICH ELISABETTA FRONTINI RAJ KAPOOR
LONDON LONDON FRANKFURT MILAN MENLO PARK
Specialisms: Expertise in Specialisms: iLevel, portfolio Specialisms: Functional Specialisms: Broad functional Specialisms: Marketing
designing and executing carve- monitoring and reporting focus on strategy, business experience: marketing, sales, and sales
out and post-merger integration Reporting and accounting model innovation, product product development, strategy, MBA from Harvard Business
Masters degree from background management and go-to-market retail, service operations, M&A School
S EC TO R FO C US
4.
University of Bologna, Italy strategies, commercial excellence, Economics background
Member of the Chartered organisation and PMI 3 years at SquareTrade
Chartered Engineer Institute of Management MBA from Stanford Executive Bain Capital's
Accountants PhD in Economics from
E arly career in industry in Italy, University of Eichstätt-Ingolstadt 8 years of consulting at Portfolio Group
UK, Russia 1 year with Langham Hall LLP McKinsey; 1 year as a Partner
International business
5 years at PwC UK 2 years with Living Bridge LLP background Senior executive in FMCG,
5 years at AlixPartners at Ferrero Group
>9 years consulting at BCG
3 years as Head of Programme
Management Office and member
of top executive team at
PDM
5.
Douglas Holding
R E S P O N SIB LY
IN V E S T IN G
6.
RAZ KHAN SHANE LAUF CHRISTIAN PAUL ADINAH SHACKLETON OLIVER STEIL
NEW YORK HONG KONG LONDON LONDON LONDON
Specialisms: Operations, Supply Specialisms: Consumer, Specialisms: Broad functional Specialisms: Environmental, Specialisms: Hands-on
Chain, Six Sigma Healthcare, Technology, Asia experience: new market entry/ Social and Governance experience in most business
Bachelor and masters degree Computer Engineering product launch, sales growth, Geography degree from UCL functions; from recovery
from Alfred University background pricing, supply chain situations to strategic
8 years at sustainability growth projects
CO N TAC T US
7.
3 years Tyco International MBA/MS from Stanford Degree from University of consultancy, ERM
Alabama-Birmingham, MBA Electrical Engineering Diploma
8 years at Cerberus Capital 5 years at KKR Capstone from Oxford University 1 year in construction as an from Ruhr University of Bochum
Management 5 years at McKinsey environmental coordinator
12 years at Roland Berger and 10 years at McKinsey, 3 years
AlixPartners as a Partner
12 years of work experience CCO and CEO at debitel AG
in Asia CEO of Sunrise
5 years with Permira in Communications AG
Hong Kong16
CONSUMER TECHNOLOGY
|
COUNTRY: POLAND ACQUIRED: 2017
Allegro Group is Poland’s largest online marketplace,
with more than 20 million registered users allowing
businesses and individuals to sell their products to
consumers. In addition, the Group operates Ceneo,
Poland’s leading online price comparison website.
WHY WE BACKED THEM
o back an iconic brand with
T o capitalise on the
T
exceptional user engagement secular growth of the
metrics Polish e-commerce market,
which is expected to double
o support a management
T
in the next five years
team with proven execution
track record of delivering
growth
THE INVESTMENT STRATEGY
o build a stronger ecosystem,
T o invest in the end-to-end
T
giving both customers and customer experience from
merchants more reasons to integrated logistics to
use the website customer service and returns
o improve the website user
T
experience across desktop
and mobile to drive improved
conversion rates
Permira provides us with unrivalled expertise in growing
e-commerce and technology businesses in emerging Europe.
We are delighted to have attracted their financial backing
and operational insights going forward, as well as their
investment commitment to the business to considerably
enhance our customers’ experience.
PRZEMYSLAW BUDKOWSKI, ALLEGRO, CEO
€3.1bn 20m #1
Transaction Registered Polish internet
value users brand
See more on our sectors p17PERMIRA ANNUAL REVIEW 2016 17
SECTOR FOCUS
4
WHO WE ARE
1.
SEC TOR FOCUS
S E L L IN G W E L L
BU Y IN G &
2.
D R I V E G ROW T H
PA RT N E R IN G TO
3.
SECTION 4
S EC TO R FO C US
4.
SECTOR FOCUS
Allegro case study 16
Consumer 18
Financial Services 22
Healthcare 26
Industrials 30
Technology 34
PDM
5.
R E S P O N SIB LY
IN V E S T IN G
6.
CO N TAC T US
7.18
SEC TO R FO C US
CONSUMER
TECHNOLOGY
Two interconnected and disruptive trends are reshaping the Consumer
sector. The first is the emergence of a new generation of consumers
who are far more focused on experiences than material possessions.
Overlaying this is the use of technology, which is forcing companies
to reassess all aspects of their businesses. Coupled together, these
trends are driving a pace of change more rapidly than at any stage
in the Permira funds’ 30+ year investment history.
CHERYL POTTER
PARTNER,
HEAD OF CONSUMERPERMIRA ANNUAL REVIEW 2016 19
SECTOR FOCUS
WHO WE ARE
1.
30 €8.3bn €5.0bn
Investments1 Equity invested1 Total current sales1
S E L L IN G W E L L
BU Y IN G &
2.
'Doing stuff not buying stuff'
In terms of changing consumer habits, there
is a major shift towards experiences rather In a world where buying decisions are
than material purchases. This is happening informed by so many disparate sources
at both ends of the age spectrum: baby- and the consumer has unlimited choice
D R I V E G ROW T H
PA RT N E R IN G TO
3.
boomers have gone past the ‘stuff at their fingertips, having the right
accumulation’ phase and are investing product is more important than ever.
much more in travel and experiences.
At the other end, millennials don’t attribute CHERYL POTTER
the same value to ownership, and are PARTNER, HEAD OF CONSUMER
spending a far greater proportion of their
disposable income on unique experiences
and bespoke brands.
S EC TO R FO C US
4.
We now spend much more of our time Market disruption
thinking about how these trends will play
Technology is accelerating and accentuating
out in the long-term. For everyone, spending
changes in consumer behaviour. Historically,
time with friends and family is highly
companies have done everything they can to
valued. This has driven strong growth in
protect their brands by exerting tight control
the casual dining market. Sushiro Global
over all touchpoints with their customers.
Holdings Ltd (P4, 2012) is a sushi restaurant
New technology and new channels have
chain operator in Japan. We worked with
changed that.
PDM
5.
management to expand the successful
concept, growing its store presence from The online ‘review culture’, where consumers
335 outlets to 450+, prior to its listing on consult people they’ve never met before as
the Tokyo Stock Exchange in early 2017. a matter of course to supplement brand-led
content. Combined with the rapid growth of
John Masters Organics (P5, 2016) is a
popular culture ‘influencers’ on platforms like
premium organic skin, hair and homecare
YouTube and Instagram which are increasingly
brand. The company started life in a salon
intermediating brand messages.
in Soho, NYC and then licensed products
R E S P O N SIB LY
IN V E S T IN G
6.
to Japan. It is part of our thesis to reunite In a world where buying decisions are informed
the licence and the brand into one business by so many disparate sources and the consumer
behind a strong management team to has unlimited choice at their fingertips, having
deliver a global growth agenda. To address the right product is more important than ever.
this complexity we put together a team At Dr. Martens (P5, 2016), the iconic British
with huge consumer experience across all shoemaker, management has sought to build
the relevant markets in Japan, the US and engagement with customers by building new
Europe to support the management team. stores, staging pop-up gigs and producing
more editorial. The company encourages
CO N TAC T US
7.
customers to share their experiences and style
tips because it believes in the product and
recognises that happy customers are the best
brand ambassadors.
1 As at 31 March 2017.20
SEC TO R FO C US
CONSUMER CONTINUED
Backing tomorrow’s winners
We have a 30-year investment track record
backing brands like Hugo Boss, Valentino and The breadth of previous success stories gives us an unparalleled view on the complex
Homebase. We have helped these, and many themes reshaping the Consumer sector. In a world where capital for successful businesses
others, develop online and mobile strategies, has largely become commoditised, having this bank of success stories and institutional
roll out new stores and develop products and knowledge is critically important. We believe the funds' track record and global network
services. And we have done this around the of Permira professionals and relationships is a clear USP for businesses looking to expand
world and through multiple economic cycles. in a complex and rapidly changing market.
Over the period 2000-2015, the only
CHERYL POTTER
institution that has invested more in PARTNER, HEAD OF CONSUMER
consumer brands is French luxury goods
company, LVMH.1
BUYING WELL
Selected current portfolio
Akindo Sushiro Allegro Group Atrium Innovations BFY Brands
Acquisition year 2012 Acquisition year 2017 Acquisition year 2014 Acquisition year 2015
Transaction value N/A Transaction value €3,068m Transaction value €754m Transaction value N/A
Country Japan Country Poland Country Canada Country US
akindo-sushiro.co.jp allegro.pl atrium-innovations.com ourlittlerebellion.com
ceneo.pl
Dr. Martens John Masters Organics S&B Vacalians
Acquisition year 2014 Acquisition year 2016 Acquisition year 2017 Acquisition year 2015
Transaction value €380m Transaction value N/A Transaction value €730m Transaction value N/A
Country UK Country US/Japan Country Germany Country France
drmartens.com johnmasters.com schustermann-borenstein.de vacalians-group.com
1 Bloomberg LP and Bernstein analysis. Note: Includes Bloomberg LP. categories: apparel manufacturers, footwear and related apparel, retail apparel store/shoe, retail – jewellery and textile apparel.PERMIRA ANNUAL REVIEW 2016 21
SECTOR FOCUS
C A SE STUDY
WHO WE ARE
1.
c.150
COUNTRY: ITALY
ACQUIRED: 2016
Fully owned
stores
S E L L IN G W E L L
BU Y IN G &
2.
Arcaplanet is a leading pet WHY WE BACKED THEM THE INVESTMENT STRATEGY
care retail chain in Italy. o help capitalise on the retail
T o consolidate within this
T
chain expansion in the resilient fragmented market through
Through its network of 152 Italian pet care market a combination of new store
directly operated stores roll-outs and potential add-on
(“DOS”), the company offers o consolidate the fragmented
T
acquisitions
Italian market starting from its
a large and diverse product existing strong leading position o enhance operational
T
range (pet food, accessories,
health and grooming) of niche
(c.150 fully owned stores) efficiencies through the growth
of its private label, improved
35%
To expand abroad
and premium brands as well sourcing, CRM optimisation
Market share
D R I V E G ROW T H
PA RT N E R IN G TO
3.
as its own pet food label. o back a strong management
T and enhanced category
team led by the CEO/founder management on chains
SELLING WELL
S EC TO R FO C US
4.
Selected past investments
PDM
5.
Ferretti Galaxy Entertainment Homebase Hugo Boss
Exit year 2007 Exit year 2012 Exit year 2002 Exit year 2015
Gross Multiple 2.3x Gross Multiple 2.8x Gross Multiple 6.1x Gross Multiple 2.3x
Country Italy Country Hong Kong Country UK Country Germany
ferrettigroup.com galaxyentertainment.com homebase.com hugoboss.com
R E S P O N SIB LY
IN V E S T IN G
6.
Iglo New Look Takko ModeMarkt Valentino
CO N TAC T US
7.
Exit year 2015 Exit year 2015 Exit year 2007 Exit year 2007
Gross Multiple 2.3x Gross Multiple 4.4x Gross Multiple 2.5x Gross Multiple N/A
Country UK Country UK Country Germany Country Italy
iglo.com newlook.co.uk takko-fashion.com valentino.com22
SEC TO R FO C US
FINANCIAL SERVICES
In the aftermath of the financial crisis and as a result of the rise of the internet, the financial
services industry has been changing rapidly. As banks rebuild their capital reserves and divest
non-core activities, a strong flow of sizeable and attractive investment opportunities are
emerging in a number of sub-sectors.
Market disruption
The 2008 financial crisis still casts a shadow
across the financial services industry. Banks
continue to retrench from their pre-crash roles
as financial conglomerates to focus chiefly on
retail, corporate and investment banking,
and unwinding their positions in services such
as insurance, consumer lending, wealth and
asset management, and many others.
As part of this shake-out, we are witnessing
far more outsourcing of bank functions such
as IT, fulfilment and receivables collection
that had historically been kept in-house,
and we expect this trend to continue.
PHILIP MUELDER In short, after nearly 10 years, we are yet to
PARTNER,
CO-HEAD OF arrive at a ‘new normal’ in financial services.
FINANCIAL SERVICES, Many of the large banks have still not gone
HEAD OF LONDON through the necessary structural changes.
As this process unfolds in the years to come,
we will continue to witness a steady stream
of opportunities across our core sub-sectors:
wealth management, specialty insurance,
specialist finance and fintech.
Our approach in action
What we are seeing time and time again
are good businesses that have been starved
of investment and under-managed since
the financial crisis. Management teams
in these businesses are frustrated because
critical business decisions have been taken
out of their hands by people further up the
bank and have little commercial relevance
for the business they are trying to build.PERMIRA ANNUAL REVIEW 2016 23
SECTOR FOCUS
WHO WE ARE
1.
7 €2.7bn €3.9bn
Investments1 Equity invested1 Current sales1
S E L L IN G W E L L
BU Y IN G &
2.
While the opportunity set is huge, getting
to these businesses and understanding the
complexities of carving them out of very
Permira’s combination of Financial
large banking conglomerates is a far greater
challenge requiring in-depth execution skills Services and Technology expertise
has proved a real advantage helping
D R I V E G ROW T H
PA RT N E R IN G TO
3.
and market knowledge.
businesses establish the platform they
A good example is Tilney Group (P5, 2014), need to compete and grow.
a financial planning, wealth management
and investment company that we backed JAMES FRASER
after a two-year courtship with Deutsche PARTNER, CO-HEAD OF
FINANCIAL SERVICES
Bank. The separation allowed the business
to develop and deliver its own strategy
without being constrained by the politics
S EC TO R FO C US
4.
of sitting within a larger organisation. Part
of the investment thesis was to consolidate
this fragmented industry, and the funds
have subsequently backed the business
through a series of acquisitions, including the
transformational acquisition of Towry in 2016.
At a time when added levels of compliance are
required and capital constraints have curtailed
PDM
5.
banks’ ability to invest in new technologies,
Permira’s combination of Financial Services
and Technology expertise has proved a real JAMES FRASER
PARTNER,
advantage helping businesses establish the CO-HEAD OF
platform they need to compete and grow. FINANCIAL SERVICES
Take Tricor (P5, 2016) (a first in Asia for the
Financial Services team), a corporate services
provider carved out from The Bank of East
Asia. Together with our Technology team, we
R E S P O N SIB LY
IN V E S T IN G
6.
developed an investment thesis based on the
application of technology to drive automation
and expand the product range and quality
of service provided to customers.
CO N TAC T US
7.
1 As at 31 March 2017. Includes Tricor which completed in April 2017 and Alter Domus which completed in May 2017.24
SEC TO R FO C US
FINANCIAL SERVICES CONTINUED
Partnering for growth UK and applied it to the German market to
enable a successful merger between GFKL
As a specialist in Financial Services, with
and Lowell Group in 2015 and the groups’
a global network, Permira is well placed As the financial services industry moves
subsequent acquisitions of Tesch Inkasso
to identify those businesses within larger away from financial conglomerates or
and IS Inkasso Service in 2016.
conglomerates with long-term growth and an integrated bancassurance model,
transformation potential. Crucially we are a trusted partner in a sector we like to back independent, challenger
where sensitivities around reputational issues businesses who are more focused and
Our capacity to leverage this global network
frequently arise. The complexity of these deliver superior products and services.
is especially important in an industry where
situations and a lack of transparency mean
legislation and regulatory oversight operates
that fewer of these opportunities emerge in PHILIP MUELDER
at a very local level. For example, the UK
wide auctions, so having the relationships PARTNER, CO-HEAD OF FINANCIAL
debt purchase market is one of the most SERVICES, HEAD OF LONDON
and the credibility to deliver in complex highly
sophisticated yet domestic of all financial
regulated situations is critical.
services markets. We harnessed our insights
and understanding of best practice in the
BUYING WELL
Selected current portfolio
Alter Domus JRP Group Lowell
Acquisition year 2016 Acquisition year 2009 Acquisition year 2015
Country Luxembourg Country UK Country Germany & UK
alterdomus.com wearejust.co.uk lowellgroup.co.uk
Tilney Group Tricor
Acquisition year 2014 Acquisition year 2017
Country UK Country Hong Kong
tilney.co.uk hk.tricorglobal.comPERMIRA ANNUAL REVIEW 2016 25
SECTOR FOCUS
C A SE STUDY
WHO WE ARE
1.
€700m
ACQUISITION YEAR: 2017 Transaction
COUNTRY: HONG KONG value
S E L L IN G W E L L
BU Y IN G &
2.
Tricor is a leading provider of WHY WE BACKED THEM THE INVESTMENT STRATEGY
integrated business, corporate o back a leading provider
T o drive growth through service
T
in outsourced corporate services optimisation and enhanced
and investor services in Asia and a premium brand in IT automation
Pacific. Find out how we are the industry
supporting its growth plans in o strengthen the regional
T
o benefit from strong structural
T sales force
Asia and beyond… market dynamics which is
growing at 8–10% p.a.
o consolidate a highly
T
fragmented market
2,000
o support a truly differentiated
T
business which has built a unique Employees
D R I V E G ROW T H
PA RT N E R IN G TO
3.
position in the investor services
and share registry market in
Hong Kong
SELLING WELL
S EC TO R FO C US
4.
Selected past investments
PDM
5.
The AA Saga (Acromas)
Exit year 2014 Exit year 2016
Gross Multiple 3.7x Gross Multiple 1.6x
Country UK Country UK
theaa.com corporate.saga.co.uk
R E S P O N SIB LY
IN V E S T IN G
6.
CO N TAC T US
7.26
SEC TO R FO C US
HEALTHCARE
In such a complex sector, identifying the most interesting
investment opportunities and helping the Permira funds’
portfolio companies grow involves building a team with the
experience and credibility to work simultaneously across
multiple disciplines including science, medicine, regulation,
commercial and financial ideas.
MUBASHER SHEIKH
PARTNER,
HEAD OF HEALTHCAREPERMIRA ANNUAL REVIEW 2016 27
SECTOR FOCUS
WHO WE ARE
1.
10+ c.€900m 2.8x
Investments1 Equity Gross realised
invested1 returns
S E L L IN G W E L L
BU Y IN G &
2.
Identifying growth potential in a Another interesting theme that we are
complex marketplace following is long-term structural growth in the
pet-care market as ownership of companion
The healthcare sector is vast and constantly This team has the knowledge and
animals grows around the world and families
in flux so we don’t limit our approach to experience to work across multiple lavish more time and money on their pets.
two or three sub-sectors. As the youngest of sub-sectors and hold conversations
D R I V E G ROW T H
PA RT N E R IN G TO
3.
the five sector teams at Permira, we look at with the scientists and clinicians. Because of our track record in this sub-
things slightly differently. We take a view on sector, we continue to be a proud sponsor
the whole sector and dig deep into themes MUBASHER SHEIKH of the Animal Health Forum in London and
that in our view have investment potential. PARTNER, HEAD OF HEALTHCARE Shanghai this year.
At one level, everybody can recite the four or
five major global healthcare trends, but for European player of any scale in the space. Pharmaceuticals
us it is only when you peel back the layers This led to the formation of the Pantheon Another recent area of focus has been
and uncover parts of that ecosystem that Group, one of the emerging leaders and a pharmaceuticals. Intense price pressure
S EC TO R FO C US
4.
that things become interesting from an platform to consolidate this fragmented has led to a wave of M&A among the big
investment standpoint. European market. To date, we have supported players, while simultaneously we have seen
In order to pursue this strategy effectively, the business to make 13 acquisitions, the quite rapid growth of biotech players to
we knew from the start we would need to creating a group that provides a more rival big pharma.
combine investment expertise and financial efficient and cost effective service to
hospitals and helps take costs out of This led us to interesting potential
acumen with the ability to talk credibly to
shrinking healthcare budgets. opportunities in highly specialised outsourced
scientists and clinicians on their own terms.
manufacturing. We looked at the new breed
So we built a diverse group that is weighted
of ‘garage band’ biotech firms that are
PDM
5.
towards clinical expertise, including a Animal health
focused on developing the next generation
transplant physician, a physician and a Another ongoing focus is animal health, of complex antibodies. The scientific work
former leader from Novartis, to name a few. an area that has yielded interesting being done at this level is very exciting, but
This team has the knowledge and experience opportunities. these venture-backed biotech firms want
to work across multiple sub-sectors and hold The top-level trend is population growth and to concentrate on research and outsource
conversations with the scientists and clinicians rising disposable incomes, which in turn has as much of the manufacturing as possible.
five levels down and develop a bespoke value led to increasing consumption of meat and This process eventually saw us back
creation plan for every partnership. fish. This has driven up productivity demands Lyophilization Services of New England, Inc
R E S P O N SIB LY
IN V E S T IN G
6.
on animal farming, an industry that is already (“LSNE”) (P6, 2017), a contract development
Our approach in action struggling to sustain growth with finite and manufacturing organisation for the
environmental resource and space. pharmaceutical and medical devices markets.
A good example of this approach is Pantheon
(P5, 2014), a provider of end-to-end products In light of this trend, we backed Pharmaq (P4, With a focus on clinical trial and small/
and services for diagnostic imaging and 2012), a leading fish vaccines manufacturer, medium commercial volumes, LSNE operates
biomedical equipment. The top-level trend on the growth thesis: that fish farming in a market benefiting from growth in
is the runaway costs of healthcare across (currently accounting for about half of fish biologic medicines and a shift to more
nearly all markets. We looked down the production worldwide) would continue to complex molecules, as well as from increased
CO N TAC T US
7.
chain at areas where costs could be taken grow over time.. During the partnership, we outsourcing from biotech and pharmaceutical
out, and recognised the maintenance of supported the company’s growth across companies. With a highly qualified team and
critical machines in hospitals was one such new species, new immunologies and new a flexible customer approach, LSNE is ideally
area. These machines are very expensive, geographies. At exit, the business had placed to address some of the most complex
get mistreated and need to be recalibrated successfully grown into a clear world leader in formulations in the pharmaceutical space.
regularly. Unlike in the US, there was no the fish vaccine industry.
1 As at 31 March 2017. Includes LSNE which completed in April 2017.28
SEC TO R FO C US
HEALTHCARE CONTINUED
Where next? Elsewhere, China will be interesting in the
years to come as high-quality biological
This creative investment approach is paying
research continues to shift eastward.
dividends in the quality of the pipeline we are Over the last couple of years we
Japan has the largest elderly population in
seeing. Over the last couple of years we have have applied this approach more
a concentrated space anywhere in the world
applied this approach more systematically systematically to the US market, where
and we are increasingly seeing interesting
to the US market, where we now have a we now have a dedicated group of
opportunities. As one of the few global funds
dedicated group of investment professionals investment professionals supporting our
in an underpenetrated Japanese market,
supporting our global healthcare franchise. global healthcare franchise.
we are well positioned to take advantage
We have already found that the sheer size
of these trends in the years to come.
and depth of the market in the US is creating MUBASHER SHEIKH
lots of opportunities for us, as demonstrated PARTNER, HEAD OF HEALTHCARE
with our recent investment in LSNE.
BUYING WELL
Selected current portfolio
LSNE Pantheon Healthcare
Acquisition year 2017 Acquisition year 2014
Transaction size N/A Transaction value €161m
Country US Country UK/Switzerland
lyophilization.com pantheonhg.comPERMIRA ANNUAL REVIEW 2016 29
SECTOR FOCUS
C A SE STUDY
WHO WE ARE
1.
20 years
ACQUISITION YEAR: 2017 Quality regulatory
COUNTRY: US history
S E L L IN G W E L L
BU Y IN G &
2.
LSNE is a leading contract WHY WE BACKED THEM THE INVESTMENT STRATEGY
development and manufacturing o back a leader in an attractive
T o vertically integrate into the
T
niche with key competitive attractive active pharmaceutical
organisation specialising in sterile advantages ingredients (“API”) category
lyophilization and fill & finish
of drugs and devices, serving a o support a strong management
T o broaden the manufacturing
T
team in a rapidly growing market footprint across geographies
range of pharmaceutical, biotech
and medical device customers.
which is predicted to grow 7–9% p.a.
o benefit from a market
T
o expand capacity to
T
enable further commercial-
7–9% p.a
that has high barriers to entry level contracts and extend
given requirements of technical capabilities to better serve Growth of
D R I V E G ROW T H
PA RT N E R IN G TO
3.
expertise, regulatory track both US and European market
record and capital investment commercial customers
SELLING WELL
S EC TO R FO C US
4.
Selected past investments
PDM
5.
Creganna Medical Pharmaq Rodenstock
Exit year 2016 Exit year 2015 Exit year 2007
Gross Multiple 3.3x Gross Multiple 3.3x Gross Multiple 4.3x
Country Ireland Country Norway Country Germany
cregannatactx.com pharmaq.com rodenstock.com
R E S P O N SIB LY
IN V E S T IN G
6.
CO N TAC T US
7.30
SEC TO R FO C US
INDUSTRIALS
TECHNOLOGY
The industrial landscape is obviously huge and Technology
Decreasing cost, miniaturisation, wireless
diverse – so we look for companies that play technology and the primacy of software
into three growth themes: the adoption of are transforming the sector. Technology
has become pervasive and interconnected
technology, the incorporation of services and through the whole value chain in most
industrial businesses. For example, the
the emergence of ‘winning’ global platforms. ubiquity of low-cost sensors creates a need
for software that can make sense of the
massive amount of data being generated
and provide an array of aftermarket
solutions that in turn impact the interface
with customers.
Maximising the benefit of technology at
each stage in the value chain is critical and
almost always a key part of how Permira
helps management drive value. We look for
businesses where we can combine our 30+
year experience in the Industrials sector with
our Technology expertise to help increase
efficiency and productivity, drive down costs
and ultimately help them grow.
echnology has become pervasive and
T
RICHARD CAREY interconnected through the whole value
PARTNER, chain in most industrial businesses.
CO-HEAD OF
INDUSTRIALS
RICHARD CAREY
PARTNER, CO-HEAD OF INDUSTRIALSPERMIRA ANNUAL REVIEW 2016 31
SECTOR FOCUS
WHO WE ARE
1.
20+ €4.4bn €1.8bn
Investments1 Equity invested1 Total current
sales1
S E L L IN G W E L L
BU Y IN G &
2.
In the e-commerce, fulfilment business, Services In almost all of the funds' portfolio
Intelligrated (P4, 2012–2016) is a good example. companies, it is becoming increasingly
The incorporation and growth of services
Our understanding of software and a clear difficult to turn up and simply sell a product.
in industrial businesses is another key area
roadmap for how it should be incorporated into Customers are demanding a full solution for
of focus, both from an origination point
the business was a key factor in persuading the the lifetime of their investment and everyone
of view and as a value creation tool during
D R I V E G ROW T H
PA RT N E R IN G TO
3.
founders to partner with the Permira funds from is trying to provide it for the whole customer
ownership. Maximising the potential
the outset. journey. Across the funds’ portfolio we are
of ongoing services is vital in two ways:
seeing the service element account for a
During the investment period, the management it enables you to get closer to your
much larger share of revenues.
team put this vision into action, increasing yearly customers and it gives you a transparent
R&D spend from $6 million to $27 million to stream of repeatable revenue. The growth In the case of BakerCorp (P4, 2011), a largely
build a software platform that met the growth in aftermarket services is, in many cases, US-based industrial services company, it has
ambitions. We partnered with management enabled by the integration of the types of led the field in the integration of monitoring
to recruit a senior professional from the Permira technology discussed above, which helps technology in all of its equipment. This provides
S EC TO R FO C US
4.
network to lead the software charge. industrial companies to provide data and two clear advantages to the customer, enabling
services that weren’t available before. them to accurately monitor exactly what is
We ultimately shared the benefits of this
foresight as the business doubled in size and
was re-rated under the funds' ownership.
PDM
5.
Maximising the potential of ongoing
services is vital in two ways: it enables
you to get closer to your customers and
it gives you a transparent stream of
repeatable revenue.
TORSTEN VOGT
PARTNER,
TORSTEN VOGT CO-HEAD OF
PARTNER, CO-HEAD OF INDUSTRIALS INDUSTRIALS
R E S P O N SIB LY
IN V E S T IN G
6.
CO N TAC T US
7.
1 As at 31 March 2017. Includes DiversiTech which signed in April 2017.You can also read
