UK mid-market private equity firm ISIS Equity Partners has sold motor claims investigation service provider Brownsword to the Capita Group, a UK professional and support services company. The sale was for an enterprise value of £8.5 million (€12.1 million; $15.8 million).
ISIS invested £2.5 million in the company in December 2002. The sale represents an annual return of 40 percent and 1.85 times original cost.
If Brownsword achieves specific performance targets by December 2006, ISIS will also receive a deferred consideration of £5 million, increasing the return to investors of up to 2.25 times original cost.
Brownsword provides services to the car insurance industry including the investigation of traffic accidents; vehicle theft and fraud; debt recovery and general claims handling.
The company has worked with UK-based technology company Digilog to create the Voice Risk Analysis process, a lie detector for use by insurance firms in claims processing.
In the year to July 31, Brownsword's annual turnover was £6 million and its operating profit was £522,000. It employs 100 members of staff in Manchester, Birmingham and Brentwood, Essex.
ISIS is a subsidiary of F&C Asset Management, the UK's fourth largest investment company. It typically invests in transactions of between £5 million and £75 million in value in companies with profits in excess of £1 million, making Brownsword a relatively small investment for the firm.
The firm typically invests in companies in the business/financial services; consumer markets; healthcare/education; media; and IT sectors.