PE firm takes stake in fast growing global sustainability specialist

Manchester-based Palatine Private Equity has acquired a significant minority shareholding in fast growing, global sustainability specialist, Anthesis Group.

It said its underlining its long-held commitment to deliver positive ESG (environmental, social and corporate governance) outcomes and its first-mover status in mid-market impact investing.

Established in 2013, Anthesis has grown to a turnover of £40m (FY2019) and is ranked in the prestigious Sunday Times Fast Track 100 as one of the UK’s fastest-growing private companies, and the International Track 200, for its fast growth in international sales.

Based in London with a global workforce of 600 consultants across 17 countries and four UK offices including Manchester, Oxford and Bristol, Anthesis supports leading companies, cities and organisations with financially-driven sustainability strategies, underpinned by technical expertise.

Its clients include 25% of the FTSE 100, 65 of the Fortune 500, and world-leading brands such as Amazon, Target, Kimberley-Clark, and Nestle.

The business has recorded underlying organic revenue growth in excess of 20% since 2017 and achieved double digit revenue growth in 2020, even with the challenges of the pandemic.

Anthesis will now benefit from Palatine’s pioneering ESG framework, unique expertise in returns-focused impact investing, and its highly successful track record in buy-and build, which has included completing more than 200 acquisitions to date.

The investment will enable Anthesis to scale at pace, organically and acquisitively, across borders and disciplines, and accelerate its impact through digitisation.

The acquisition combines investment from both Palatine’s Buyout and its Impact fund – which is the first dedicated returns-focused impact fund launched in the mid-market to back profitable companies which have a positive impact on the environment or society.

Anthesis will remain majority owned by its team and Palatine partners Beth Houghton and Tristan Craddock are joining the board as non-executive directors.

Beth Houghton, head of the Impact Fund, said: “Anthesis is an outstanding purpose-led business and a trusted partner to global, household name brands, major corporates and forward-thinking cities, as they work to address one of the great social and economic challenges of our time, sustainability.

“Anthesis’ mission-driven approach aligns with our long-term commitment to place purpose and responsibility at the heart of our investment strategy. We see tremendous growth potential as more progressive businesses seek out expert support to embrace sustainability in a meaningful way. We are thrilled to be working closely with Stuart and the Anthesis team and take the business to the next level.”

Anthesis co-founder and chief executive, Stuart McLachlan, said: “We have 10 years to effect change. Our market is now awake to the reality of climate impact and the need for unsustainable brands and organisational models to transform. Anthesis is positioned in the middle of these commercial and sustainable performance drivers.

“We are constantly looking at how we can scale our impact by helping our clients navigate through these constraints, risks and opportunities.

“While we have achieved strong growth since the company was formed in 2013, we need to accelerate progress, and I’m delighted that Palatine are joining us on this journey. Palatine understands that the way business repositions their brands and operations to become a force for good will determine future performance, or, more relevantly, sustainable performance.”

Gary Tipper Palatine Private Equity managing partner, said: “Having embedded pioneering ESG practices across our buyout funds for more than a decade and been the first in our market to recognise the potential for strong returns from impact investment in the mid-market, we see a deep cultural alignment between Palatine and Anthesis.

“We’ve followed the business’ rapid growth for a number of years. Now we’re looking forward to deploying our expertise in value creation, digital transformation and successful buy and build strategies to help Anthesis increase its scale and impact as it continues to deliver crucial support to businesses across the globe.”

In 2021, Anthesis was certified as a B Corp, recognising that it has the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.

Investec has provided debt finance to support the transaction.

Palatine was advised by Gateley (legal), Clearwater International (corporate finance and debt advisory), RSM (tax), Armstrong (commercial DD), Grant Thornton (FDD), Berkeley (operational DD) and Cyberfort (cybersecurity DD).

Anthesis was advised by Jamieson (lead advisory) and Blake Morgan (legal).