YFM banks strong returns from part sale of investment in EIKON Group
Funds advised by YFM Equity Partners (YFM) have banked a healthy return multiple of 2.25x within two years of their initial investment in EIKON Group, with YFM retaining a minority investment.
In March 2018, YFM initially provided GBP6 million funding to EIKON, a London-based leading provider of digital mastering and localisation services to the international entertainment industry. This funding, from YFM’s British Smaller Companies VCT funds and Growth LP funds, was mostly used to expand the company’s execution capabilities through development of a major new facility in Los Angeles.
EIKON partners with major Hollywood studios and global streaming platforms, offering market-leading facilities, an innovative approach and a strong reputation for service and quality of delivery. The business has achieved rapid sales growth, averaging a growth rate of 55 per cent each year over the last three years.
In October and December 2019, EIKON secured additional growth funding from mid-market private equity investor, Tenzing, to support the continued growth of the business. This has also enabled YFM funds to realise cash proceeds equating to a 2.25x return multiple on the whole of the original investment within just 21 months, achieving an Internal Rate of Return of 62 per cent. In addition, YFM still retains a minority investment comprising equity and loan notes in EIKON, which provides an opportunity for additional future returns.
David Bell, Head of Portfolio at YFM, says: “We backed an experienced and ambitious team who have fully delivered on their original growth plans at the time of our 2018 investment. We are pleased to have banked a strong return for our investors, whilst retaining an investment which we hope will lead to additional returns in future as the business continues on its growth journey.”
Peter Wright, EIKON CEO, says: “We have really enjoyed working with YFM, who have been a great partner and backed us to deliver our plans. The cultural fit has been strong and we have enjoyed YFM’s straight-forward and pragmatic approach.”