REG - Chrysalis Investment - Disposal and Portfolio Update

Chrysalis InvestmentsAnnouncement

19/12/2024 13:15

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RNS Number : 7944Q  Chrysalis Investments Limited  19 December 2024

The information contained in this announcement is restricted and is not for
publication, release or distribution in the United States of America, any
member state of the European Economic Area (other than to professional
investors in Belgium, Denmark, the Republic of Ireland, Luxembourg, the
Netherlands, Norway and Sweden), Canada, Australia, Japan or the Republic of
South Africa.

 

 

19 December 2024

 

 

Chrysalis Investments Limited ("Chrysalis" or the "Company")

 

Disposal and Portfolio Update

 

Featurespace

 

Further to the announcement made on 26 September 2024, the Company can confirm
that the transaction to sell its entire holding in Featurespace to Visa has
now completed and all closing conditions have been satisfied.

 

Chrysalis will shortly receive initial cash proceeds from the sale of
approximately £79 million. Further proceeds, amounting to approximately £11
million have been deferred in escrow, as is typical of this type of
transaction. The total consideration paid by Visa for Featurespace remains
confidential.

 

As noted in the announcement of 26 September 2024, the Company's total
investment in Featurespace was £29.5 million; as such, the proceeds received
at completion represent a money multiple return of 2.7 times, and if the
amount held in escrow is paid in full, this will increase to 3.0 times.

 

Featurespace will become part of Visa's Risk and Identity Solutions business,
which will enhance the provision of fraud protection services to Visa's
customers and consumers.

 

Liquidity and buyback

 

As of 18 December 2024, the Company had liquidity of approximately £70
million (which includes the drawdown of the £70 million loan facility from
Barclays Bank plc, as well as certain post year-end follow-on investments),
comprising a position in Wise of approximately £3 million, with cash and
equivalents making up the balance. Receipt of initial proceeds from
Featurespace will see this rise to approximately £149 million.

 

The Company has been undertaking a share buyback - with an initial target of
£40 million - funded by the proceeds from the sale of Graphcore earlier in
the year. As of 18 December 2024, approximately 25 million shares had been
bought back into Treasury at a cost of approximately £23 million, implying
£17 million of this initial tranche remains.

 

With the initial proceeds from Featurespace now received, and given that
sufficient capital is now in place to fund it, the Company intends to continue
its capital return programme up to £100 million, as soon as reasonably
practicable (at this moment, the Company is currently in "closed period" for
its Annual Report & Accounts and is unable to vary instructions to its
brokers regarding buy-back quantum, beyond the £40 million currently
authorised). An increase in the capital return to up to £100 million is as
set out in the second element of the Company's Capital Allocation Policy
("CAP"), which formed part of the continuation vote approved on 15 March 2024.

 

Nick Williamson and Richard Watts (Managing Partners of the Investment
Adviser) comment:

 

"Over the last sixteen years, Featurespace has built a suite of machine and
deep-learning products to combat payments fraud and other financial crimes.
From small beginnings, the company now protects 500 million consumers and
100,000 businesses globally and processes over 100 billion transactions per
annum. This success is testament to Featurespace's relentless innovation, ably
guided by Martina King (CEO) and David Excell (Founder).

 

This exit, at up to 3x invested capital, represents a strong return for our
shareholders, and we wish the whole Featurespace team well as they start a new
leg of their journey as part of Visa.

 

Following the receipt of proceeds, we are delighted that the second element of
the CAP is now fully funded, and that the Company will be able to continue to
return capital to shareholders in advance of what we anticipate to be a
successful Klarna IPO in the not-too-distant future."

 

-ENDS-

 

 For further information, please contact

 Media                                     +44 (0) 7921 881 800

 Montfort Communications:                  chrysalis@montfort.london

 Charlotte McMullen / Imogen Saunders

 Investment Adviser

 Chrysalis Investment Partners LLP:        +44 (0) 20 7871 5343

 James Simpson

 G10 Capital Limited (AIFM):               +44 (0) 20 7397 5450
 Maria Baldwin

 Panmure Liberum:                          +44 (0) 20 3100 2000

 Chris Clarke / Darren Vickers

 Deutsche Numis:                           +44 (0) 20 7260 1000

 Nathan Brown / Matt Goss

 IQEQ Fund Services (Guernsey) Limited:    +44 (0) 1481 231852

 Aimee Gontier / Elaine Smeja

 

LEI: 213800F9SQ753JQHSW24

A copy of this announcement will be available on the Company's website at
https://www.chrysalisinvestments.co.uk
(https://www.chrysalisinvestments.co.uk)

The information contained in this announcement regarding the Company's
investments has been provided by the relevant underlying portfolio company and
has not been independently verified by the Company. The information contained
herein is unaudited.

This announcement is for information purposes only and is not an offer to
invest. All investments are subject to risk. Past performance is no guarantee
of future returns. Prospective investors are advised to seek expert legal,
financial, tax and other professional advice before making any investment
decision. The value of investments may fluctuate. Results achieved in the past
are no guarantee of future results. Neither the content of the Company's
website, nor the content on any website accessible from hyperlinks on its
website for any other website, is incorporated into, or forms part of, this
announcement nor, unless previously published by means of a recognised
information service, should any such content be relied upon in reaching a
decision as to whether or not to acquire, continue to hold, or dispose of,
securities in the Company.

The Company is an alternative investment fund ("AIF") for the purposes of the
AIFM Directive and as such is required to have an investment manager who is
duly authorised to undertake the role of an alternative investment fund
manager ("AIFM"). The AIFM appointed is G10 Capital Limited (part of the IQEQ
Group).

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