CVC Growth Fund exits Kount in USD640 million deal
CVC Capital Partners' (CVC) CVC Growth Fund is to sell Kount Inc (Kount), a provider of Artificial Intelligence (AI)- driven fraud prevention and digital identity solutions, to global data and analytics company Equifax in a deal valued at USD640 million.
The transaction, which is expected to close in the first quarter of 2021, and is subject to customary closing conditions and regulatory review, will see CVC secure a return of 4.7 times on its investment and a gross IRR of 34 per cent.
Formed in 2007 and headquartered in Boise, Idaho, Kount’s best-in-class fraud prevention solutions protect the customer journey and digital innovations for over 9,000 brands globally. The Company has earned recognition as a leader in digital fraud prevention, with over 13 years of data informing its advanced Machine Learning (ML) and AI-based models. This patented technology prevents digital payments fraud, new account fraud, and account takeovers to increase revenue for digital businesses, acquiring banks, and payment service providers.
"Kount was an industry leader when the CVC Growth Fund invested, and since then the company has gone from strength to strength under CEO Brad Wiskirchen’s leadership, more than tripling revenue during the investment period," says Jason Glass, Partner at CVC Growth Partners. "Through a trusted relationship with Brad, we have supported the expansion of the management team, new investment in sales and marketing and the launch of industry-leading product offerings including Kount Control, the first adaptive protection solution to stop account takeover fraud, and the Kount Identity Trust Global Network.”
“I would like to thank the CVC Growth Partners team for an incredibly rewarding partnership over the past five years,” says Wiskirchen. “The challenges of online fraud have grown exponentially and, with the guidance and support of CVC, Kount has been able to not just meet those challenges but also innovate and extend our industry leadership. Today we are well positioned to take our business to the next level with Equifax.”
“Our partnership with Kount is a perfect example of CVC Growth Partners' strategy in action," adds John Clark, Managing Partner at CVC Growth Partners. “Through our thematic origination approach we source opportunities to partner with uniquely positioned technology companies in large, growing markets. We then help them to overcome barriers to growth, and to successfully accelerate their development, empowering them to become leaders in their fields."
Barclays acted as exclusive financial advisor and Fried Frank acted as legal advisor to Kount.