Internal Rate of Return (IRR) 20

Fund

Advent 3

Sector

Technology
Money Multiple 6.2x

Inv. Date

March 2000

Exit Date

August 2010

Background

SecurePay was established in 1999, combining the latest in internet, telephony and banking network technologies to develop a range of payment-based tehcnologies and other complementary applications. Advent provided expansion capital funding in March 2000, which enabled SecurePay to commercialise its payments technology.

Advent also assisted with further acquisitions of organisations and technology platforms that complemented the core range of services and to consolidate its position as a market leader in the Australian payments services sector.

Investment Rationale

KEY QUALITIES
  • Early-stage investment risk was counter balanced by existing strong cash flow from telephone calls charge business
  • Fixed cost business with high margins that, once past break-even, would produce substantial profits with growth
  • Very good software platform and links to all major banks
  • Early-stage but gateway had made sales and was a potentially strong growth market
INVESTMENT THESIS
  • Build and commercialise a strong private payment gateway business
  • Funding costs were reduced due to strong cash flow and overheads provided by telephone call charges business
  • Exit SecurePay via a strategic sale to larger player attracted to the high-growth market

This acquisition assists with our growth in the digital world as we move to offer everything we do in the physical world, digitally.

Ahmed Fahour CEO, Australia Post

Value Add

  • Changed senior management including the founder’s role as managing director, and supported the business with extra funding until it produced sustainable profits;
  • Participated in seven synergistic acquisitions, all of which were successful;
  • Leveraged Advent’s banking relationships to enable the business to fund acquisitions from debt, which would have been unavailable without Advent’s involvement.

Exit

Australia Post emerged successful in December 2010 from three shortlisted bidders. It was a highly strategic purchase for Australia Post, which allowed them to expand their online services. Advent’s IRR on its investment was 20%, delivered primarily through a combination of organic growth and through the development of innovative proprietary systems, as well as through the acquisition of seven competing and complementary businesses.