Safety And Sustainability Solution Provider Alcumus Begins A New Journey After Its Sale To Apax

Safety And Sustainability Solution Provider Alcumus Begins A New Journey After Its Sale To Apax

UK-headquartered Alcumus today announced that private equity investor Apax had acquired a controlling stake in the business from Inflexion which acquired Alcumus in 2015. Through its 750 employees, Alcumus is one of the largest providers of digital solutions, content and services for safety, contractor risk, chemical compliance and related ISO certifications. Working closely with Inflexion, Alcumus CEO, Alyn Franklin has successfully grown the business by focusing on digital solutions, driving consistent double-digit organic growth and making a string of well-timed acquisitions. Notably, the firm bought SafeContractor in 2015 and acquired Toronto-based mobile-first safety software vendor eCompliance for £25 million in 2019.

The Alcumus transaction comes at a time of intense competition in the $1.6 billion EHS software market which Verdantix forecasts will grow to $2.5 billion in 2026 at a 12% CAGR. Since ETF Partners invested €10.6m in Enablon in 2011, private equity firms and strategic investors like Wolters Kluwer and Fortive have spent more than $4 billion to buy into the EHS software market. The absence of the world’s largest business software vendors – IBM, Infor, Microsoft, Oracle, Salesforce, SAP – has left a lot of oxygen in the market for well-run midsize businesses like Alcumus to grow. This has been good news for customers as the most recent Verdantix benchmark of EHS software found that 13 vendors – including Alcumus – have sufficient momentum and depth and breadth of functionality to be assessed as market leaders. The large number of firms with a positive assessment is a direct reflection of the heavy investment in the sector for over a decade. The not so good news for vendors is intense price competition especially in North America. Against this backdrop, the big question for investors is how to craft profitable strategies aligned with a 2030 horizon after buying assets at eye-watering revenue multiples in the mid-teens.

For a business like Alcumus, the primary answer is aligning with the operationalization of ESG strategies. The integration of ESG factors into equity investment decisions, credit ratings, lending processes and insurance provisions is gradually becoming business as usual. This elevates the value of the data captured by digital systems like SafeContractor as well as increasing the strategic importance for firms to demonstrate superior environmental, safety and social risk management systems to financial partners. Since Alcumus counts 50% of the FTSE 100 as customers the firm has a great opportunity to make savvy acquisitions from a bubbling pot of climate and ESG start-ups and thereby help listed clients facing ESG and climate regulations to connect their operational risk management to financial disclosures and ESG performance improvement.