Potentia Capital has exited its investment in software company CompliSpace with the sale of the business for $105 million, plus a deferred conditional earnout of up to $5 million, to UK company Ideagen (FTSE AIM: IDEA).

The deal is believed to have returned Sydney-based Potentia 4.3x its invested capital and generated an internal rate of return (IRR) of 150% in less than two years.

CompliSpace offers reg-tech software and education to organisations in highly regulated sectors including education, aged care and financial services. The company’s subscription-based software is used in more than 730 schools and more than 135 aged care facilities across Australia. Created in 2007, when it was split off from another business, CompliSpace has about 100 staff in offices in Sydney, Melbourne, Brisbane, Adelaide and Perth.

Ideagen provides software and services globally to organisations in highly regulated industries such as aviation, financial services, life sciences and healthcare. In addition to the UK, it operates in Europe, the US, the Middle East and South-East Asia. Ideagen has pursued an aggressive growth strategy over recent years and had made more than 20 acquisiitions before CompliSpace, its largest acquisition to date.

Technology-focused private equity firm Potentia was the largest shareholder in CompliSpace after investing in January 2020. CompliSpace co-founder James Field sold his stake to Potentia in that transaction.

CompliSpace chief executive and co-founder David Griffiths, retained a 12% stake after the Potentia acquisition. He is remaining with the business, becoming a regional senior vice president with Ideagen, and will continue to hold a significant interest.

Griffiths said joining with Ideagen would enable the CompliSpace team to introduce the UK company’s world class risk and compliance software services to the Australian market while taking the schools and aged care software developed by CompliSpace to a global market. 

CompliSpace recorded a loss of $3.6 million on revenue of $15.4 million for the year to June 2021 and ended the financial year with net assets of $11.6 million.

CompliSpace was advised on the sale by E&P, Herbert Smith Freehills, EY and BDO, while Ideagen was advised by Minter Ellison and Grant Thornton.