Recurring Revenue Lures Private Equity
Business certification and standards management has been tempting private equity players into its domain, as evidenced in Amtivo Group’s acquisition of Certification Europe last March, just after lockdown came into force.
Amtivo, owned by UK private equity firm August Equity, had been mopping up British businesses specialising in ISO consultancy and training, before it moved to acquire the Dublin venture, in a deal speculated to be worth €6m to the vendors.
Certification Europe was founded in 1999 by former lecturer Michael Brophy and some of his erstwhile colleagues. The business helps clients achieve ISO certification for a range of management systems, including quality, health and safety, energy, and information security. It also provides training programmes
and audits to assist customers reach and maintain these international standards.
Brophy (51) has been at the helm of Certification Europe for 20 years and has grown it into a sizeable enterprise. The business has offices in Ireland, the UK, Italy and Japan, and recorded revenue of €6.5m in 2018, booking a net profit of €475,000.
Speaking shortly after the acquisition, Brophy said that Amtivo approached his company in the summer of 2019. “Organic growth and our own financial resources could only take us so far. The deal with Amtivo was the next logical step in evolving the company,” he explained.
The business employs c.75 people and its clients include Facebook, PayPal and pharma companies. Brophy stayed on with Certification Europe following the Amtivo acquisition.
According to its latest annual return, 38 shareholders owned the company, including John Ryan (22%), Michael Brophy (21%), Thomas Cooke (21%) and Paul O’Grady (8%). Kernel Capital, which invested in 2014, was also a beneficiary from the deal.