Paris-headquartered Five Arrows, the private equity arm of Rothschild & Co, has made a significant investment in Northern Ireland-based literacy and accessibility technology company Texthelp.

LDC, the private equity arm of Lloyds Banking Group is exiting the investment.

Five Arrows is investing through its European fund (Five Arrows Principal Investments) and its US fund (Five Arrows Capital Partners). Five Arrows targets investments in category-leading business-to-business data and software companies across healthcare, education, and other vertical end-markets.

Founded in 1996, Texthelp has established itself in cloud-based assistive technology and learning analytics for the education and corporate sectors. The company has supported 30 million students and employees worldwide with reading, writing and numeracy, and also helps those with dyslexia or working in a second language. Its customers include large school districts in North America and Australia, schools and businesses across the UK and Middle East, and government and Fortune 500 organisations. The company employs more than 180 people across offices in Antrim, Northern Ireland, Boston and Brisbane.

Martin McKay, founder and chief executive of Texthelp said: “We are thrilled and honoured to be working with Five Arrows as we enter the next stage of our growth and expansion. We were impressed by their focus on data, software and technology-enabled businesses, and their active supportive approach to scaling businesses. We look forward to releasing two new products this financial year with Five Arrows support as we expand our workplace and education product offerings. We are also grateful to LDC who helped us go further, faster. They believed in the potential of our business, providing the investment, support and expertise to help us accelerate a truly differentiating digital transformation in a relatively short space of time.”

Sacha Oshry, managing director at Five Arrows Principal Investments added: “Texthelp is a global market leader with high recurring revenue, a proven track record of organic growth with demonstrable resilience, and significant untapped potential. We believe that Texthelp’s innovative and high-quality products make the company well-positioned to capitalise from the powerful structural growth trends in the global assistive technology and remote working markets in both the education and corporate sectors.”

Ari Benacerraf, partner at Five Arrows Capital Partners, said: “We believe that Texthelp is a highly differentiated SaaS company with a loyal customer base in a rapidly growing sector. Five Arrows has significant experience backing global vertical B2B software businesses and businesses which serve the North American K12 education sector. We look forward to supporting Martin and his team to accelerate Texthelp’s growth ambitions over the coming years. This is yet another great example of our US and European corporate private equity teams working collaboratively to invest in companies that stand to directly benefit from the global networks and transatlantic synergy that exists across our private equity platform.” 

Texthelp and LDC were advised by DC Advisory (corporate finance), Gateley (legal), Pinsent Masons (legal) and EY (personal tax). Five Arrows was advised by Raymond James (corporate finance), Shoosmiths (legal) and EY-Parthenon (commercial).

Date published: 22 December 2020

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