For Charles-Hubert Le Baron, partner at Astorg, the Zug-based company Redslim has the opportunity to develop in markets such as the United States or Asia.
Astorg, a pan-European private equity firm, announced the signing of an agreement to acquire a majority stake in Redslim from its founders. This Zug-based company specializing in “data management” has experienced strong growth over the past four years, with an annual growth rate of between 30 and 40%, the two companies indicated last week in a communiqué.
Redslim currently employs more than 100 people. The financial conditions regarding this transaction have not been communicated. An update on this operation with Charles-Hubert Le Baron, Partner, Head of Software & Technology at Astorg Mid-Cap, the division of this private equity company which focuses on medium-sized companies.
Why has Astorg Mid-Cap entered into an agreement to acquire a majority stake in Redslim, a Zug-based data management company?
Redslim is a company which offers, through a proprietary technological platform, services which make it possible to aggregate and optimize the processing of data on behalf of more than 30 companies around the world. Redslim is a leader in a niche field that has significant development potential. It is also a company active in the technology and software field, which is one of our favorite sectors. Previously, the Astorg Mid-Cap fund also invested, for example, in Sofico or Opus 2, which are also active in the technology world.
“We have already invested in Autoform, a Zurich-based software company specializing in simulation solutions for the automotive sector, as well as in the Neuchâtel-based Metalor company active in metal refining.”
Another important aspect is that it is an operation carried out in collaboration with the Redslim team and its founders. We are a financial investor but we actively participate in the development of our portfolio companies and in reaching growth milestones and thresholds. In the case of Redslim, this can be done through an acceleration of growth in the markets where it is already active but also by continuing its international development. It is partnership work with high added value which is carried out in collaboration with the founders of Redslim. A sales process was already being prepared with Edmond de Rothschild Corporate Finance, with a launch planned for early next year, and we convinced the Redslim team that we were the right partner to conclude a transaction now .
Was this acquisition also motivated by the fact that transaction prices have fallen somewhat in recent quarters in the private equity sector, as is sometimes said?
A distinction must be made here based on sectors. When it comes to the technology sector, and even more so when it comes to companies whose revenues are based on a business model based on subscriptions and strong growth, as is the case for Redslim, prices remain at very stable levels. We valued the company based on its fundamentals, which are very strong and have potential for global growth.
Redslim is based in Switzerland. Does the appreciation of the franc against the euro and the dollar in recent years make the purchase price of such companies too expensive?
This was not the decisive criterion. Redslim is an internationally active company with very international teams. The aspect of currency variations did not have a significant impact on the valuation level.
What are the strong points of the applications offered by Redslim and how will you influence its strategy?
Redslim’s solutions are primarily aimed at companies active in consumer goods and consumer health products, such as groups like Mars, Danone or L’Oréal. Such players have significant needs to be able to aggregate and optimize the processing of data, particularly commercial data, sometimes coming from multiple sources. It is therefore not only necessary to be able to collect data correctly but also to be able to structure data that is sometimes very fragmented at the start. It is important for these groups to be able to homogenize all this data in order to be able to interpret it and monitor commercial performance, but also the impact of marketing or innovation expenses, among other examples.
The addressable market is considerable: there are today 200 to 300 active companies, which are in Redslim’s core targets with development potential which remains significant with the 30 existing clients. A company like Redslim can not only increase its presence within its existing customer base, but it also has significant development opportunities in markets such as the United States or Asia, with the opportunity also to expand its offering.
Have you already made other investments in Swiss companies previously and are you considering doing so again?
We have already invested in Autoform, a Zurich-based software company specializing in simulation solutions for the automotive sector. In a more industrial area, we have invested in the Neuchâtel-based company Metalor active in metal refining. These are two successful transactions for Astorg. We will continue to focus on Switzerland as part of our truly pan-European investment approach. Today, within the Astorg MidCap fund, we have our investments in France, the United Kingdom, the Benelux, Germany and now in Switzerland with Redslim.
