Advent Partners 2 Fund
In August 2017, Vantage Private Equity Growth 3 completed a $10m investment commitment to the Advent Partners 2 Fund.
The Advent Partners 2 Fund is managed by leading Australian mid-market buyout firm, Advent Partners of Melbourne. Advent Partners 2 is targeting total commitments from investors of $300m, for investment into lower to mid-market expansion and buyout opportunities in Australia and New Zealand. Advent completed a first close of Advent Partners 2 Fund in early August 2017.
Advent Partners (formerly Advent Private Capital) were established in 1984 and is one of Australia’s oldest private equity fund managers. The Firm has operated continuously for over 30 years, establishing and managing many funds and investing in more than 80 private businesses.
The Advent Partners 2 Fund will focus on lower to mid-market buyouts, investing in profitable companies with earnings (EBITDA’s) between $5m to $30m and an enterprise value of $30m to $150m at investment.
Advent Partners 2 will seek to invest between $15m to $50m into businesses with low capital intensity and strong market positions, operating in industries experiencing strong growth. Advent Partners’ target industry sectors include healthcare, consumer branded, proven technology & software, education & training and leading edge businesses.
Advent Partners 2 has completed seven investments to date; Silk Laser Clinics, Compass Education, Mandoe, Medtech, Flintfox, Zero Latency and Imaging Associates Group.
Silk Laser Clinics. During January 2018, Advent Partners completed an investment in premium laser and skin rejuvenation business, Silk Laser Clinics.
In 2009, the first Silk Laser Clinic opened in Hyde Park, South Australia, after its four Directors identified a need in the Adelaide market for affordable medical grade laser treatments in a comfortable and convenient environment.
Silk has grown since then, with clinics now operating in twelve locations across Australia, including nine in Adelaide, South Australia, two in Darwin, Northern Territory and one in Hobart, Tasmania. In addition Silk currently has plans to expand with additional clinics to be added to the portfolio across the country.
Using only world class technology and medical grade lasers Silk Laser Clinics have become the clinic of choice for Laser Hair Removal, Cosmetic Injections, Skin Treatments and Tattoo Removal.
Silk invest in the latest technology, certify and train experienced staff and make sure they understand customer needs, so they can formulate a customised treatment plan to address each customer’s concerns and deliver results.
During August 2018, SILK completed the acquisition of a third-party skincare brand called AestheticsRx (ARx). ARx is a nine-piece advanced cosmeceutical range that contains a high concentration of active ingredients. The rollout of ARx across the SILK clinic network will be completed by the end of FY19 and will replace the third-party agency brands that are currently being stocked at the clinics.
Also, during the quarter, SILK acquired The Laser Lounge, a complementary franchise business headquartered in Sydney, with 16 clinics across New South Wales and Queensland. With this acquisition, the combined clinic network of 38 now covers 6 Australian States and Territories, positioning SILK as one of largest national players in the market.
The acquisition also provides the Company with the resources and support required for the Group’s accelerated growth strategy.
On 15 December 2020, Advent Partners 2 completed the successful exit of SILK Laser Clinics Australia via an IPO. This exit represents VPEG3’s first exit from its underlying portfolio.
Advent Partners 2 made its initial investment in SILK on 31 January 2018 and since this time Advent has supported SILK to become a national leader in the Australian non-surgical aesthetics market taking its network of clinics from 12 to over 50.
This growth included greenfield clinic expansion, an acquisition of a rival network of clinics which were subsequently rebranded SILK and the purchase and relaunch of a proprietary skincare brand Aesthetics Rx.
SILK Laser Clinics Australia (ASX: SLA) listed on 15 December 2020 at a share price of $3.45, implying an enterprise value of $162 million. Upon listing Advent Partners 2 realised a portion of their investment holding representing 2.0x of the Fund’s original investment in SILK, with the Fund retaining 28% of SILK post IPO.
Once fully completed the exit will deliver top quartile performing returns for Advent Partners 2 investors, including VPEG3 investors. The realised proceeds from the IPO were distributed by Advent to VPEG3 on 18 December 2020 and subsequently distributed to VPEG3 investors during the March 2021 quarter.
Compass Education.During November 2018, Advent Partners 2 invested in Compass Education, one of Australia’s leading Student Information System (SIS) software providers with ~1,800 primary and secondary schools across Australia, Ireland and New Zealand. The platform is one of only a few cloud-based, multi-lingual and multi-currency SaaS school management platforms, and includes a broad range of modules covering attendance, reporting, parent communication, student well-being, learning management, staff development, online payments, events and data analytics.
The investment will support Compass’ growth plans, including continued growth in Australia and further offshore expansion, as well as the continued enhancements to its market leading product functionality.
Mandoe. During October 2019, Advent Partners 2 completed the investment into Mandoe (Picasso Holdco Pty Ltd). Mandoe is an Australian founded software provider with unique platforms in digital signage and customer engagement. The business is a market leader in the rapidly growing digital signage industry.
Mandoe’s proprietary cloud-enabled software allows any business to seamlessly control a digital signage network of any size, with the ability to create, manage and display personalised content. The software allows the creation of engaging and dynamic animated content through the use of an extensive library of prebuilt, customisable templates and a vast catalogue of stock videos, images, and graphics to create bespoke, yet targeted, advertising for their business in just a few clicks. Mandoe’s customer base includes some of Australia’s largest retailers and quick-service restaurants, such a McDonalds, David Jones, Caltex and Dominos Pizza. The business also serves many medium to small businesses across the Australia.
Medtech. During June 2020, Advent Partners 2 invested in Medtech, a leading provider of Practice Management Software (PMS) across Australia and New Zealand, delivering an extensive product suite allowing physicians and their staff to manage all administration and clinical aspects of their practices.
Founded in 1989, Medtech is a leading SaaS business that provides mission-critical software to ~18,000 GP, Allied Health and Specialist users across Australia and New Zealand. It is the market leader in the New Zealand GP market with significant market share. It offers an all-encompassing suite of features including core practice management and administrative functions, kiosks, SMS reminders, cloud hosting and a range of integrations with third-party providers. The business has a long and successful track record of providing PMS facilities, which is underpinned by its intimate knowledge of practice workflows and high-quality software development. The business has ~50 staff, with core business functions based in Auckland, New Zealand and a customer support office in Melbourne, Australia.
Medtech operates across a large, stable market with growing adjacencies as practices transition from legacy platforms to platforms with enhanced functionality. Medtech is well positioned with its market leading product, Evolution, which is a natural upgrade path for those using its legacy product.
Flintfox. On 16 June 2020, Advent Partners 2 completed its fifth investment for the Fund by acquiring Flintfox, a leading developer of trade revenue management (TRM) software. Flintfox’s software is used by global trade and enterprise organisations to manage, track, and reconcile trade promotion and rebate expenditure, and execute multi-channel pricing strategies. The company was founded in 1987 and is based in Auckland, New Zealand. It has over 170 employees primarily in New Zealand and the USA, along with Canada, the UK, Brazil and Singapore.
Flintfox has ~125,000 users located across 24 countries. It is a global leader within the TRM market, offering modularised solutions in the form of price execution and rebate management across all delivery platforms, including SaaS, Private Cloud and On-Premise. Flintfox’s global leadership is evidenced by its admission into Microsoft’s “Inner Circle” program representing the top 1% of Microsoft Dynamics ERP partners worldwide. The Microsoft relationship has supported Flintfox building a global customer base as its software can seamlessly integrate into MS Dynamics.
ZERO LATENCY. On 10 August 2021, Advent Partners 2 Fund invested in Zero Latency, the global leader in the multi-player, Free Roam Virtual Reality (‘FRVR’) space. The Business is widely regarded as the global pioneers of ‘warehouse scale’ virtual reality (‘VR’), creating immersive experiences by combining premium hardware and player wearables with its market-leading technology, proprietary software and exclusive gaming content.
Founded in 2013, the Business has grown to over 50 sites internationally across more than 20 countries. The Business has ~60 staff, and is headquartered in Melbourne, Australia.
Zero Latency VR has established itself as one of the fastest-growing, and the most disruptive player in a sector that is at the intersection of technology, leisure and gaming. The Business had reached an inflection point and was seeking additional expertise and capital to assist in accelerating its network expansion plans. With consumers moving up the experience curve, increasing VR’s mass market appeal, Advent views this as a land-grab opportunity, and can see a path to triple the size of the network with significant whitespace identified globally.
Advent believe that Zero Latency VR has strong growth potential and are working with the Management team to accelerate its growth by focusing on enhancing the Company’s marketing capability, the introduction of more sophisticated analysis around the site selection process, and strategies to improve unit economics.
Imaging Associates Group. On 13 September 2021, Advent Partners 2 Fund announced an investment in Imaging Associates, one of the leading independent providers of diagnostic imaging services in Victoria and regional New South Wales.
Established in 2008, Imaging Associates operates across five private practices and holds two large hospital reporting contracts in Victoria and regional New South Wales. The business has rapidly grown to 51 core reporting doctors, and has established private practices in Box Hill, Mitcham, Tecoma, and Baw Baw across Victoria, and Wagga Wagga in New South Wales.
IAG provides reporting of x-ray, ultrasound, CT, MRI, nuclear medicine and other radiology services. Diagnostic imaging forms a critical part of healthcare and is a central part of diagnosing patient conditions.
VPEG3’s share of this investment was paid to AP2 during October 2021.