Kestrel exits its holding in Eckoh generating a total profit of £13.2m
Kestrel announces that is has fully exited its holding in Eckoh plc. The exit crystalises a lifetime profit on the investment by Kestrel Opportunities (“KOF”) of £13.2m, representing the Fund’s third largest profit to date. The investment yielded a return on invested capital of 1.9x and an IRR of 25%.
Kestrel started investing in Eckoh in 2011 shortly after the Company had completed an extensive restructuring of what was a diverse group, in order to focus on Speech and Payment solutions. At the time the Company was entirely UK focussed, with c.£8m of revenue and having only just moved into profitability at the EBITDA level.
By the end of 2021, Eckoh had become a global provider of Secure Payment and Customer Contact solutions with 40% of its business being generated out of the US. Over 70% of the Group’s annual revenues of £30m were classified as recurring, adjusted EBITDA was £6.4m and net cash was £11.7m. During the second half of 2021, the shares traded in the 50-65p range.
Kestrel started investing in Eckoh in January 2011, buying shares at 7p. Having taken very substantial profits between 2013 and 2015, we continued to back the Company as it grew organically and by acquisition over the next six years.
Kestrel continues to believe that Eckoh is an excellent business with a strong management team and we wish it every success for the future.