Riverside buys military training firm

The US mid-market firm has acquired Bohemia Interactive Solutions, completing yet another Australia-related education investment.

The Riverside Company has invested in an Australian military training business, Bohemia Interactive Solutions, with plans for international expansion, according to a company statement.

The financial details of the deal were not disclosed, but a Bohemia statement said it was a “significant investment in the company”. Riverside tends to make investments of $200 million or less. The deal was made from the firm's European fund. 

Bohemia develops games for training technology and interactive simulation systems for defense- and emergency-focused customers, the statement said. Bohemia supplies the US Department of Defense, UK Ministry of Defense and Australian Defense Force among its internationally-based clients.

Bohemia was founded in Australia in 2011 and since 2007 has been led by chief executive Pete Morrison, who was previously a Captain in the Australian Army. In the army, Morrison helped train soldiers as a part of mission rehearsal exercises for deployments to Iraq.

“[Investing in this type of business] does require an understanding of procurement practices for [military-related] companies,” co-chief executive of Riverside Stewart Kohl said in an interview.

“We use, for example, retired military generals who can very much help us to understand how procurement decisions are made and what direction the militaries are going – particularly in [this segment]. Simulation is a relatively new area. We think it is a powerful macro trend because simulation is growing and becoming more and more realistic.”

The firm’s central sales offices are now in the US, but it also has major sales and operations offices in Australia, the UK, Czech Republic and Poland, with plans for further international expansion.

In November, Riverside invested in Australian education business Learning Seat as its first investment from its Riverside Asia-Pacific Fund II, which made a first close on $70 million in September, Private Equity International reported earlier. The firm also made an investment in Australian coffee chain operator Cibo as an add-on acquisition for its portfolio company Retail Zoo.