Energy Services Group, a portfolio company of Accel-KKR since last April, has agreed to acquire Utiligroup from NorthEdge Capital, with the Financial Times reporting a price of £100 million. NorthEdge will log a gross 5.7x return with the sale. Based in the UK and founded in 1997, Utiligroup is a SaaS provider for the utilities and energy industries, while ESG provides assorted tech services in those markets.
For Accel-KKR, meanwhile, the deal is both familiar and unusual—depending on the perspective from which you examine it.
Founded in 2000 as a joint venture between VC giant Accel and buyout behemoth KKR, Accel-KKR now operates independently but retains its original focus: making middle-market investments in the software sector. In that way, the acquisition of Utiligroup is par for the course. Since its founding, more than 72% of Accel-KKR’s PE investments have occurred in the IT industry, according to the PitchBook Platform.
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The bolt-on deal becomes a departure, however, when you consider Utiligroup’s geography. In the past 17 years, more than 84% of Accel-KKR’s investments have been in companies located in the US, with European businesses making up a mere 11%. Canada, Asia and Oceania have played host to the remaining fraction of the firm’s deals.
In terms of activity, Accel-KKR has settled into a consistent rhythm so far this decade, completing somewhere between 10 and 15 new deals each year since 2011, per PitchBook data. And during the past 10 years, the firm has gradually increased the size of the funds used to conduct those deals. After wrapping up its third flagship private equity vehicle with $600 million in commitments in 2008, the firm most recently closed its fifth fund on $1.3 billion in 2015.
Interested in more info on the hybridized tech investor? PitchBook subscribers can learn more about Accel-KKR’s closed funds, recent deals, management team and more right here.
Article by Kevin Dowd, PitchBook