BUSINESS DESCRIPTION

Ullink is a leading global provider of electronic trading applications and connectivity to the financial community. Founded in 2001, Ullink has grown quickly to become a global provider of multi-asset trading technology and infrastructure. Ullink has over 2,000 customers from c.40 countries with customers ranging from tier 1 global sell-side brokers to regional niche specialists across Europe, North America and Asia Pacific. The business is headquartered in France, although c. 75% of staff and c. 90% of revenue are outside that country.

WHY WE INVESTED

Capital markets software has been a strong focus for HgCapital since 2002 and the TMT Team has followed Ullink since 2009.

This investment is in line with HgCapital’s sector-focused approach of investing in leading global providers of vertical market application software. Ullink shares many of the core characteristics that HgCapital looks for: an excellent platform for growth; a subscription revenue model; and a diversified and loyal client base.

HOW DO WE INTEND TO CREATE VALUE?

Ullink has differentiated itself by offering a more modern and flexible trading system at a lower cost of ownership. HgCapital will help the business accelerate its strong organic growth, through increased new customer wins resulting from investment into the sales and marketing functions. We also believe there is an opportunity to consolidate smaller players in electronic trading, with the acquisition of NYFIX and Metabit in September 2014, a significant step forward. The acquisition has given the business a broad international footprint and offers substantial opportunities to increase sales to the current customer base, as well as efficiencies in the cost base and shared infrastructure.

WHAT HAS BEEN ACHIEVED?

The acquisition of NYFIX and Metabit was transformative for Ullink and more than doubled the revenue of the business. Since then, the management team has been focused on the integration of the three businesses and realising the strategic value of the combination.

A new senior management team was appointed in 2015 with Didier Bouillard joining as CEO and Graham Howell as CFO, Bertrand Sciard also moved from interim CEO to Chairman.

HgCapital is currently working with Ullink on the following initiatives: implementation of a new pricing plan; implementation of detailed customer satisfaction measures and account management; assessment of further M&A; and a review of segment profitability and drivers of margin and investment.

HOW IS IT PERFORMING?

The NYFIX acquisition has been well integrated into Ullink and its performance has substantially improved in comparison to that prior to acquisition.

Investment was made in late 2015 into sales and research and development to drive increased revenue growth in 2016. We are seeing the benefit of this with stronger revenue and accelerated EBITDA growth. Ullink is highly cash generative and we therefore expect net debt to continue to reduce.

A combination of strong trading, high cash generation and positive currency movements have led to a significant increase of £9 million in the Company’s valuation of its stake in Ullink over 2016.

HOW WILL WE CRYSTALLISE VALUE?

Ullink has a financial profile that is very attractive, with high levels of recurring revenue and organic growth, a scalable cost base and a high rate of cash conversion. We believe the company will be an attractive acquisition for both trade and financial buyers.

Sector Location Date of Investment Residual cost £’000 Unrealised Value £’000
TMT France March 2014 10,034
19,166