Advised The Foundry, a developer of visual effects (VFX) software, on its sale to The Carlyle Group
Mar 2011
acquired by
  • Sector: Application Software; Industrial Tech
  • Deal Type: Private Equity Deals; Venture Capital Exits
  • Engagement type: Sellside
  • Size: <$200m
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Arma Partners is pleased to announce that it acted as exclusive financial adviser to The Foundry Visionmongers Ltd (“The Foundry”) on the sale of a significant majority stake to The Carlyle Group (“Carlyle”). The founders and management will continue to retain a significant minority stake and drive the continued growth and customer-focused innovation that the Company has consistently delivered. Financial terms of the transaction were not disclosed.

Headquartered in London with more than 100 employees, The Foundry develops visual effects (VFX) software that has been used to make recent “must see” movies including Avatar, Tron: Legacy, Alice in Wonderland, The King’s Speech, 127 Hours and Black Swan – all award winners or nominees.

Since the management buyout of the Company in June 2009 backed by Advent Venture Partners (“Advent”) and Falcon Investment Advisors (“Falcon”), the management team and founders have transformed the Company from a best-of-breed plug-in developer to the leading industry VFX software provider through a combination of unique product partnerships, sales execution, channel development and global expansion. During this period, headcount tripled from 35 to more than 100 and growth accelerated, with revenue increasing from £6.1 million to £14.9 million in 2010. The Company expanded its now 4,000-strong customer base to include The Moving Picture Company (MPC), Prime Focus, Dreamworks, Industrial Light and Magic (ILM), Framestore, Cinesite, Double Negative and several other high-end facilities.

Carlyle will support The Foundry’s expansion and invest to develop their specialized product offerings. Furthermore, this investment will facilitate the company’s diversification into other adjacent market arenas as the product range continues to evolve and grow.

– The Foundry is a world-leading innovator of visual effects and image processing technologies that boost productivity in motion picture and video post-production

– The Foundry has a well-established client base that includes leading visual effects facilities worldwide such as Warner Bros, The Moving Picture Company, Weta Digital, Framestore, Sony Pictures Imageworks and Digital Domain

– The Foundry was backed by Advent Venture Partners and Falcon Investment Advisors

– The Carlyle Group is a global alternative asset manager with $97.7 billion of assets under management committed to 76 funds as of September 30, 2010

– Carlyle invests across three asset classes – private equity, real estate and credit alternatives – focusing on aerospace & defense, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services, telecommunications & media and transportation

– Since the management buyout of the Company in June 2009, the management team and founders have worked closely with Advent and Falcon to transform the Company from a best-of-breed plug-in developer to the leading industry VFX software provider through a combination of unique product partnerships, sales execution, channel development and global expansion

– During this period, headcount tripled from 35 to more than 100 and growth accelerated, with revenue increasing from £6.1 million in 2009 to £14.9 million in 2010. The Company expanded its customer base to over 4,000 accounts

– Carlyle will support The Foundry’s expansion and invest to develop their specialized product offerings and facilitate the Company’s diversification into other adjacent market arenas

– The Foundry had received inbound expressions of interest from both financial and strategic counterparties due to its unique position in the VFX software industry and corresponding attractive financial profile

– Arma was retained to coordinate these inbound expressions and drive a focused, competitive process to deliver an optimal outcome for all stakeholders

– Arma actively supported the management to articulate The Foundry’s growth strategy and financial plan and prepare the team for interactions with counterparties

– Once the buyer had been identified, Arma, together with the management team, was able to drive the process to successful completion within a compact timeframe

– The transaction valuation represents an exceptional return for the shareholders, and positions the Company for sustained growth under the ownership of Carlyle