Private Equity Giant Carlyle Group Acquires Rapidly-Growing EHS And Risk Management Software Vendor IsoMetrix
The Carlyle Group, a global investment firm with $223 billion of assets under management, today announced that its $698 million Carlyle Africa (Buyout) Fund had acquired South Africa-headquartered IsoMetrix. Terms of the deal for IsoMetrix were not disclosed. Given revenue growth above 30%, its 185 employees and its differentiated capabilities for capital project sustainability, Verdantix estimates that the valuation was between $30 million and $45 million. Carlyle bought 530 employee NOSA in April 2018, another South African software and services provider focused on EHS training, audits, food safety and process excellence. As investment firms face increased scrutiny of their Environmental, Social & Governance metrics, experts at IsoMetrix are also positioned to advise Carlyle on sustainability and corporate responsibility.
What’s the strategic logic? Carlyle will fund the growth of IsoMetrix and NOSA will utilize the IsoMetrix technology expertise and EHS software applications to enhance its value proposition to more than 1,000 customers. By working together IsoMetrix and NOSA will develop digital EHS managed services which is a powerful market trend. Cross-selling EHS and risk software to the large NOSA customer base in Southern Africa where competition is limited in core industries like mining, power and transport, should continue to support revenue growth of more than 30% for IsoMetrix. NOSA also has a presence in the Chinese coal sector which will open up additional sales avenues for IsoMetrix.
Since IsoMetrix will continue as a standalone entity, disruption to the core EHS software business will be minimal. Additional working capital from Carlyle will be used to continue building out the IsoMetrix EHS software platform which was assessed to have reached, for the first time, the Leaders’ Quadrant of the Verdantix 2019 benchmark of EHS software. The analysis found that IsoMetrix has strong functionality for contractor safety management, EHS risk and hazard assessment and sustainability management. The deal with Carlyle and strategic partnership with NOSA will strengthen the commitment of customers like Absa, Assmang, Senwes, Transnet and Zimplats to IsoMetrix. Verdantix also anticipates that IsoMetrix will fund a stronger presence in Australia, Canada and the US to digitally enable capital projects and risk processes at asset intensive industries.