ROCKPOOL ANNUAL REVIEW 2024
OVERVIEW
Rockpool Investments had another busy and successful year in 2024, executing a number of notable new investments and exits and generating significant value for our investors.
Across the year, Rockpool acquired four new platform businesses and made a number of follow-on investment rounds into existing portfolio companies, deploying £73m capital in total. These investments supported both M&A activities and organic growth across the portfolio.
Rockpool returned a total of £119m to investors in 2024 through exits, debt refinancing and interest payments. Looking ahead, Rockpool anticipates further exits in 2025, which are expected to deliver strong returns to investors.
In January 2024, Rockpool investors provided finance to Harley Academy, a leading UK aesthetics training and clinic business. Harley is at the forefront of setting new standards in medical education in the rapidly expanding aesthetics industry.
In May 2024, Rockpool made a significant investment in Edinburgh-based 2i Testing, a software quality engineering company. This funding is intended to boost 2i’s growth by enhancing its service portfolio and supporting M&A activities. Since the initial investment, 2i has been actively exploring acquisition opportunities, with its first deal expected to conclude in early 2025.
Rockpool’s second technology sector investment in 2024 came in June, backing Communicate, a Teesside-based leader in cybersecurity and network infrastructure solutions. This partnership aims to support Communicate’s ambitious buy-and-build strategy in the IT services sector, building on its three successful pre-investment acquisitions.
In August 2024, Rockpool invested in Oxford Online Pharmacy, a rapidly expanding online pharmacy delivering healthcare services directly to patients’ homes. The company demonstrated remarkable growth over the past year, achieving a 114% increase in revenue and more than doubling its profitability, highlighting the effectiveness of its strategy and robust market position.
EXITS YIELDING REMARKABLE VALUE
In March 2024, Rockpool exited its investment in Mecsia, one of the UK’s fastest-growing technical services businesses, through a sale to Synova LLP. Under Rockpool’s ownership since 2020, Mecsia increased revenues from £15 million to over £100 million, driven by organic growth and four strategic acquisitions. The exit delivered a blended 7x equity return and 120% IRR for Rockpool investors. Rockpool re-invested for a minority stake alongside management and Synova, and will continue to support Mecsia on its buy-and-build journey.
Rockpool also celebrated the successful sale of its majority interest in Alchemist, a learning and development firm catering to blue-chip corporate and public sector clients, to Horizon Capital. During Rockpool’s period of ownership, Alchemist more than tripled its EBITDA. As part of the transaction, Rockpool maintained a minority position alongside Horizon and management. Sales terms remain confidential, but the exit yielded a significant return for Rockpool investors.
In June 2024, Rockpool completed the divestment of its stake in Smyle Group, a London-based creative agency, to The Human Network. The Human Network is the parent company of universal experience agency, Identity Global. This exit provided a successful undisclosed return for Rockpool investors.
TEAM ANNOUNCEMENTS
In April 2024, Rockpool announced the promotion of Toby Hurdle to Investment Manager and Guy Nieuwenhuys to Investment Director, underscoring the firm’s commitment to developing talent and acknowledging their significant contributions to its success.
Additionally, in September 2024, Scott Sheldon joined the team as an Investment Analyst. Scott transitioned from the Rockpool Relationships team, where he advanced the investor sourcing and onboarding process and sat on the marketing committee. Scott is a Chartered Financial Analyst and holds a BA in Financial Economics from Coventry University.
PORTFOLIO HIGHLIGHTS AND M&A
Rockpool’s portfolio companies demonstrated exceptional resilience and progress in 2024, with impressive revenue growth of 39% across the portfolio. This strong performance was driven by effective marketing strategies, robust business development initiatives, and strategic acquisitions.
A notable example is Communicate, which acquired York Data Services in September 2024, in just under two months after Rockpool’s initial investment. This acquisition, Communicate’s fourth overall, substantially expanded its network coverage across Northern England and London. Communicate continues to actively pursue additional bolt-on opportunities, with plans to finalise its fifth acquisition in early 2025, supported by a further funding round from Rockpool.
TARGETED INVESTMENTS IN 2024
Several other portfolio companies have made strategic acquisitions over the past year including EC Electronics, which purchased Netherlands based Liad Electronics in January 2024 and Finitor Wealth’s acquisition of Fidelium in May 2024. Ahead of its sale to Synova, exited portfolio company Mecsia completed an acquisition of Scott Combustion, with support and resources provided by Rockpool.
These achievements underpin the effectiveness of Rockpool’s investment strategy and the strong growth potential within its portfolio companies. The firm’s ability to identify and support high-growth businesses organically and through M&A support has resulted in substantial value creation in 2024.
STRATEGIC MID-MARKET PRIVATE EQUITY PARTNERSHIPS
Rockpool continues to strengthen relationships with mid-market private equity firms, leveraging these partnerships for both exits and co-investment opportunities. In 2024, Rockpool co-invested in two exits, reflecting the depth of these relationships and our confidence in the ongoing success of our portfolio companies.
These co-investment opportunities provide Rockpool clients with unique access to mid-market private equity investments, allowing them to continue benefiting from the growth potential of businesses following successful hold periods with Rockpool.
LOOKING AHEAD TO 2025
As we move into 2025, Rockpool anticipates a number of exciting new platform investments in the pipeline, ongoing discussions with existing portfolio companies about potential acquisitions and delivery of further successful exit outcomes for our investors.
Rockpool remains committed to our flexible investment approach, adapting to economic shifts while concentrating on high-potential opportunities. We look forward to building on the successes of 2024 and delivering continued value for our investors in the coming year.
To learn more about our offering and our upcoming deal flow in 2025, contact your Rockpool Relationship Manager, or email team@rockpoolinvestments.co.uk.
