Exits – IRS gives FISPE successful investment’ course

The GBP8.4 million ($13.8 million) sale of Independent Research Services (IRS) to Charterhouse Communications has generated an 85 per cent IRR to its institutional investors, led by Friends Ivory & Sime Private Equity (FISPE).

IRS, which publishes the Successful Personal Investing home study course in personal finance and investment, was the subject of a GBP3 million ($4.9 million) buyout in March 1998. FISPE took a 52.5 per cent stake in the company, investing GBP1.6 million ($2.6 million) through the Baronsmead Venture Capital Trust and Baronsmead Venture Nominees, alongside GBP600,000 ($984,000) from ProVen Private Equity. IRS’s sale generated cash proceeds of GBP4 million ($6.6 million), equivalent to a cost multiple of 1.5, for the FISPE funds. IRS is the eighth investment exited by Baronsmead VCT.

AIM-listed Charterhouse Communications publishes personal finance and mortgage-related magazines for private investors and professional advisers. By acquiring IRS, as well as adding revenues from sales of the home study course, Charterhouse gains access to a database of more than 250,000 ABC1 individuals who have responded to direct marketing.

A few weeks before the IRS sale, FISPE realised a portion of its investment in SDL when the company floated on the London Stock Exchange. SDL, a leading provider of product localisation, globalisation and internationalisation services, and developer of language technology tools, received a total of GBP3 million ($4.9 million) backing from FISPE across two funding rounds in 1997 and 1998. FISPE owned approximately 30 per cent of the company before the flotation. At a placing price of GBP1.34 per share, SDL had an initial market capitalisation of GBP45 million ($74 million), while the return to private equity shareholders stood at 117 per cent.