Silverfleet Capital

Astron

Business overview

Astron was a leader in the field of document management and associated business process outsourcing services, with operations in the UK, Continental Europe, USA, India and Sri Lanka. Subsequent to our exit, the business was rebranded and is a core part of the Global Document Solutions business unit of RR Donnelley, a Fortune 500 company based in Chicago.

Investment rationale

Within the print management marketplace, contracts were becoming larger and more complex and customers were increasingly comfortable with outsourcing print management contracts to bigger suppliers with a demonstrable track record.

We had been working with Bob Thian, the former CEO of HMSO, with a view to acquiring a business in this space, developing it by acquisition, thereby enabling it to compete more successfully for the growing number of large outsourcing contracts becoming available within both the public and private sectors. In early 2000, we acquired the platform businesses, Tactica for c. £55 million.

Value creation

Following the acquisition of Tactica, we swiftly set about growing the business through buy and build, completing the £23 million acquisition of Astron in December 2000.

Astron’s CEO, David Mitchell, was appointed as CEO of the newly-merged Tactica and Astron entity. Under David’s leadership, we embarked upon a significant buy and build programme which enabled the company to expand its service offering, geographic reach, and the scale necessary to tender for major contracts.

In total, three further bolt-on acquisitions were made during the period of our ownership, culminating in the £130 million acquisition of edotech in April 2004.

Outcome

Towards the end of 2004, we commenced a dual track exit process, which concluded with the £520 million trade sale to RR Donnelly announced in April 2005, generating a 5.4x return and an IRR of 40%.