As we reported at the end of last year, levels of equity finance for high-growth businesses in the UK returned to more normal levels in 2018, following a meteoric rise in the years up until 2017 (more details to come in The Deal 2018). With that being said, several large fundraisings occurred, including $250m for the challenger bank Revolut, and $200m for the AI processor manufacturer Graphcore. In this post, we look instead at the top acquisitions of high-growth businesses in the UK in 2018.
1. Ziylo (£623m) by Novo Nordisk
A university spinout from Bristol, Ziylo were acquired in August by a large Danish pharmaceutical company Novo Nordisk. Ziylo developed glucose binders that Novo Nordisk are now using in a drug discovery program, in order to create “smart insulin” products for the treatment of diabetes.
Whilst this comes acquisition top of the list, the full sum will be released in tranches dependent on certain milestones being met for the drug.
2. Lagan Construction Group (£455m) by Breedon
Should Ziylo’s smart insulin not reach the necessary commercial milestones, the largest acquisition in 2018 of an independent company will actually have been of Lagan Construction Group, a Northern Irish construction firm incorporated back in the 60s. In 2014 they were featured in Fast Track’s Top Track 250 high-growth list, and on the same list in 2017. The company was acquired by Breedon, an AIM-listed construction group, for £455m.
3. Apogee Corporation (£305m) by HP
Apogee develops hardware for printing machines, and the broader technological systems that organisations use to print documents. Whilst this may sound less than glamorous, the company grew ambitiously from 2013 onwards, raising several rounds of equity finance, growing their turnover from £90m to £208m, and featuring on Fast Track’s Profit 100 high-growth list. They were snapped up by HP Inc in August 2018.
4. NewVoiceMedia ($350m/£264m) by Vonage
NewVoiceMedia provided clients with a “cloud call centre”, a highly flexible platform which syncs with CRM systems to instantly pull up a customer’s data when they either call a business, or are called by the business. The software analyses the makeup of the conversation, judging how much time the customer or agent spoke, and how much time was spent in silence, allowing agents to optimise their call method.
This Basingstoke company was founded in 2000, but only achieved real growth in the years after 2010. In the 2011 – 2018 period, turnover grew from £3m to over £40m, and in September 2018 they were acquired for $350m by Vonage, an American cloud communication corporation specialising in Voice Over the Internet Protocol (VoIP).
5. Concept Life Sciences (£164m) by Spectris
As opposed to a traditional life science company, i.e. one that develops new drugs, Concept operates in the consultancy and outsourcing side of the life science sector, offering out their in-house laboratory and scientists to other companies in need of greater facilities. The company got started with a $100m injection from Equistone Partners in 2014, and was acquired a few years after by Spectris, a supplier of precision instrumentation and controls designed for use in industrial applications.