Q1 2023: High-Growth Acquisitions
Farzana Haque, 13 April 2023
Last year, we saw the IPO market tumble from the highs of 2021—but the decline of the acquisition market was nowhere near as steep, with high-growth acquisitions dropping by only 13.8% from 2021 to 2022. Compared to Q1 2022, acquisitions in Q1 this year have fallen by 26%, from 247 to 183. However, the market seems to be recovering with deals increasing by 12% from Q4 2022 to Q1 2023. So, we may well see a flurry of exit activity this year.
Of the 183 Q1 2023 high-growth acquisitions, 62% were operating in the business and professional services sector whilst 38% were technology companies. Here, we’ve profiled five exciting acquisitions that caught our eye, from five different sectors.
5 high-growth acquisitions in 2023 so far
Sector: Consumer Banking and Financial Services
Total Equity Raised: £95.6m
Acquiring company: Acorns
Founded in 2007, GoHenry provides pre-paid debit cards for 6-18-year-olds, aiming to teach financial independence. The business has received a whopping £95.6m across 12 equity rounds. Featuring in eight high-growth lists—FT 1000, Fast Track Tech Track 100 and 100 FinTech Disrupters to name a few—the company had achieved a 20% scaleup status prior to its acquisition.
GoHenry was acquired by the American savings and investment app, Acorns, in early April. Noah Kerner, CEO of Acorns, commented: “GoHenry’s mission-driven approach is perfectly aligned with Acorns, which we expect will help us accelerate our roadmap and deliver financial wellness to the whole family through all of life’s stages.”
Existing GoHenry investors such as Edison Partners, Revaia, Citi Ventures, Muse Capital and Nexi will all be transferring their equity holdings to Acorns in the deal. In GoHenry’s latest fundraising in October 2022, it raised funds to expand globally and was valued at £315m post-investment. Meanwhile, Acorns was valued at £1.61b in its latest funding round in March 2022, giving us an indication of the combined value of the two companies.
Sector: IT Consultancy
Total Equity Raised: £20.7m
Acquiring company: Crosslake Technologies
Intechnica is a 2010-founded IT support provider. Its services range from cybersecurity assessment and IT due diligence, to building intelligent automation and bespoke software solutions. It has raised £20.7m across eight equity rounds and has even spun out its own company in July 2022: Netacea. Intechnica has also achieved a 20% scaleup status and featured in The Northern Tech 100 high-growth list in 2017 and 2018.
Intechnica was acquired by Crosslake Technologies, a data-driven technology advisory service, in January for a sum of £14.5m. The acquisition provides an exit for Intechnica’s largest stakeholder, Merica Asset Management PLC. Speaking on the acquisition, Intechnica’s founder Jeremy Gidlow commented: “Crosslake’s experience, data and expertise – especially in the areas of cybersecurity, engineering and enterprise systems – complements our current offerings and allows us to more fully create impact for our clients. At the same time, we’re also able to leverage Crosslake’s global reach to expand the impact of our bespoke digital labs and data science services.”
Sector: Beauty Services
Total Equity Raised: £650k
Acquiring company: Impress
Launched in 2014, Diamond Whites offers at-home teeth-straightening and whitening services. Its products can be found in multiple retailers such as Tesco and Superdrug. It raised £650k across two rounds with the latest round closing in September 2022 and raising £100k. Following that investment, the company was valued at £10.0m.
In February, the company was bought by the Spanish orthodontics company, Impress. The consideration paid was £26.6m. Following the acquisition, Diamond Whites’ CEO Ben Reed has been appointed UK CEO of Impress.
Commenting on the acquisition, Reed said: “We’re extremely proud to be merging with Impress. Both Impress and Diamond Whites share a similar business vision and company values; championing innovative technology and positive patient experience.” CEO of Impress, Vladimir Lupenko, also remarked: “We are so excited about the merger with Diamond Whites team and look forward to continuing building a top-tier, innovative clear aligner brand in the UK.”
Jigsaw Insurance Services
Headquarters: North Yorkshire
Sector: Insurance Services
Total Equity Raised: N/A
Acquiring company: PIB Insurance
Jigsaw Insurance Services was founded in 2000 and provides a range of insurance services through its five businesses. For example, it offers motor insurance through NCI Insurance, pet insurance through 4Paws, and breakdown insurance through rescuemycar.com. It has never raised an equity round but received an Innovate UK grant in June 2021.
It has been in acquisition talks with PIB Insurance since November 2022. The deal was finally completed in February, resulting in PIB Insurance making a cash offer for the entire share capital of Jigsaw. The consideration paid was £22.6m. On the sell side, Jigsaw was advised by IMAS Corporate Finance whilst, on the buy side, PIB Insurance was advised by Stifel and Dorsey & Whitney.
Managing Director of Jigsaw, Neil Richards-Smith, will retain his position. Commenting on the deal, he said: “We are very excited to be joining the PIB Group. Since our first introductions, it was without doubt that PIB was the business we wanted to be part of as our future home […] We look forward to collaborating with new colleagues and working together to open new doors that sometimes just aren’t available to independent brokers.”
Sector: Built Environment and Infrastructure
Total Equity Raised: £7.66m
Acquiring company: Badger Meter
University of East Anglia spinout, Syrinix, develops water infrastructure monitoring technology. Founded in 2003, it has featured in the IP100 high-growth list in 2015, 2016 and 2019. In terms of funding, the company has received £7.66m in equity investment across 10 rounds and a further £193k in grants. Investors in the company include 24Haymarket, ACF Investors, Angels Den, Future Fund, GWC (Greenwood Way Capital) and Low Carbon Innovation Fund.
The company was acquired in early January by the US-based provider of intelligent water monitoring solutions, Badger Meter for a sum of £15.0m.
Kenneth C. Bockhorst, CEO of Badger Meter, commented: “We are pleased to add the hardware-enabled software capabilities of Syrinix into our smart water solutions portfolio. Leveraging our industry-leading ORION® Cellular endpoints and BEACON® software as a service, we continue to expand our comprehensive digital solutions to operationalize real-time data into actionable insights that improve efficiency, resiliency and sustainability. I look forward to working alongside the talented Syrinix team to further our aim to preserve the world’s most precious resource.”
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