Information on the Target

Epiris Fund II, advised by Epiris LLP, has successfully acquired Sepura, a prominent provider of digital radio systems tailored for mission-critical communications. This acquisition marks Fund II's twelfth investment, although financial terms have not been publicly disclosed.

Based in the UK's technology hub near Cambridge, Sepura specializes in the design, development, and provisioning of digital radio devices and their associated ecosystems for mission-critical applications. The company utilizes Terrestrial Trunked Radio (TETRA) technology, providing a resilient and secure platform for voice and data communications, primarily serving government entities and emergency services. Sepura ranks among the global leaders in the public safety sector, supplying services to police, fire, and ambulance organizations worldwide, and ensures critical communications across various sectors like transportation and mining, where reliable and immediate communication is vital. Over two million Sepura devices are currently operational in more than 100 countries.

Industry Overview in the UK

The United Kingdom's digital communications industry has witnessed substantial growth, driven by the increasing demand for secure communication systems across various sectors, particularly in public safety. Technological advances have pushed the development of innovative solutions, enabling organizations to adapt swiftly to the demands of modern communication needs.

One of the crucial components of this industry is the deployment of TETRA technology, which has been widely adopted in the public safety domain. Its robustness against interferences and ability to support simultaneous voice and data transmission makes TETRA an ideal choice for emergency services that require immediate and dependable communication.

Moreover, the transition towards integrated communication systems that combine voice, data, and even broadband capabilities is transforming how organizations operate. This shift presents significant opportunities for growth as stakeholders seek streamlined solutions that enhance operational efficiency.

With the increasing emphasis on safety and security, investments in digital radio technologies are expected to rise, providing a conducive environment for companies like Sepura. These advancements in technology will likely further enhance the capabilities of the next generation of digital communication systems.

The Rationale Behind the Deal

The acquisition of Sepura aligns with Epiris's strategic vision of investing in market leaders that have significant potential for growth and improvement. Sepura's established expertise in TETRA technology and its extensive intellectual property portfolio present exciting opportunities for innovation and new product development.

From Epiris's viewpoint, this deal represents a corporate carve-out, offering a unique opportunity to inject capital and resources into Sepura to expand its operations and market presence. The potential to drive substantial growth in this sector aligns with Epiris’s commitment to transforming businesses through strategic investments.

Information about the Investor

Epiris is a prominent private equity firm recognized for its transformative investment strategies. The firm focuses on partnering with exceptional management teams to significantly enhance business performance. Epiris primarily targets control positions in UK-based companies, with enterprise values between £75 million and £500 million, typically deploying equity investments ranging from £40 million to £150 million.

Over the years, Epiris has built a strong reputation for achieving high returns on investments, having delivered a gross internal rate of return (IRR) of 38% across its initial fund. Epiris Fund II, which commenced in 2017, continues this trend with diverse investments in various sectors, including manufacturing, technology, and services.

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The acquisition of Sepura by Epiris is a strategic and potentially advantageous investment. With Sepura's established position in the digital radio market and its proven technology, Epiris stands to benefit from the significant growth potential within the mission-critical communications industry.

Given the increasing demand for reliable communication systems, particularly in emergency services and other critical sectors, the timing of this acquisition appears well-suited to capitalize on market trends. The focus on innovation and the potential for product development can further solidify Sepura’s market leadership.

Moreover, having a seasoned leadership team, including the appointment of Malcolm Miller as non-executive Chairman, enhances the management talent available to guide Sepura into its next growth phase. This reflects a commitment to leveraging expert knowledge to realize the full potential of the business.

Overall, with its unique technological capabilities and Epiris’s strategic vision, Sepura is well-positioned to navigate and thrive in the evolving landscape of digital communications, making this deal a promising investment opportunity.

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