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Rhyme

Rhyme Systems is a provider of middle and back office systems to investment management companies.

Background

The business had several owners before becoming part of Misys plc. Their two key product suites, Quasar and Fiscal, provided leading functionality to the asset management industry and were challenged only by companies’ own in-house systems. Misys plc did not see Rhyme as a core part of its global strategy and therefore decided to sell it. The Rhyme management team was equally keen to develop the business further and welcomed the opportunity to work with a private equity firm to buy the business from Misys. The team felt there was strong chemistry with Primary and were able to persuade Misys that Primary would be able to deliver the deal. We financed the management buy-out of the business in November 2003.

The Big Idea

Whilst the investment management market was only growing at a modest rate, many participants were looking to make their back offices more efficient through a combination of more systemisation and/or outsourcing to independent providers of back office services. Rhyme saw the opportunity to provide systems both direct to investment managers and to the outsourcers who needed robust, proven solutions.

The Grand Plan

We helped Rhyme by supporting its investment in the development of a new product, rhymeSIGHT, which provided a single environment and experience for a wide range of functions within asset administration. This product is used by several leading UK asset managers.

The Bottom Line

The improved focus of the business on its end market and the redevelopment of the software proposition significantly enhanced the strategic value of Rhyme’s business and we sold to an Indian IT business, 3i Infotech, in October 2006, generating a return of almost three times the original cost of the investment.

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Investment Summary

Date of investment:  November 2003
Deal status:  Realised
Date of realisation:  October 2006
Investment return multiple:  2.9x cost
For more information talk to:  Peter Jacobs or Rob Foreman

“As leader of an established team presented with the opportunity of a management buy-out from a large PLC, my main priority was to find an investor and partner who could help us navigate through an entirely new business experience. This included arranging debt finance, capital investment, agreeing management shareholdings, negotiating the sale and purchase terms and agreeing the transitional arrangements for the separation of the business. Primary proved expert in all these important domains.
   Once the buyout was complete, the Primary presence on the Board was an effective combination of active interest and tolerant support.
   In preparing for the exit process Primary gave the team good advice and then played a consistent, and calm, role in the key negotiations. Overall, my perceptions is that Primary’s focus on and experience of management led buy-outs, rather than any sector specialism, added most value. I would recommend them as an investor and partner to any ambitious management team.”

Chris Potts, Chief Executive, Rhyme Systems

 

 

 

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