RegTechIPOM&AStar of the Week

The big technology story of the last week has been the bidding war for RegTech Ideagen.

Headquartered in Nottingham and listed on the London Stock Exchange, the board of directors has recommended an all-cash offer from London-based private equity firm Hg Pooled Management to shareholders which values the company at £1.09 billion.

At the time of writing, a counter bid is expected from French rival Astorg – with which Ideagen is continuing to hold talks while London-based private equity firm Cinven pulled out of the running last week.

When I spoke with Ben Dorks earlier this year, there was no indication that this was coming. Indeed, the CEO – born and bred close to the company’s HQ – talked up the company’s own buy-and-build strategy, which he hoped would see it reach £200 million annual recurring revenue by 2025.

Having made 24 acquisitions in recent years – and grown sales and profits for 12 consecutive years, with recurring revenue now at an astonishing 88% – it should perhaps come as no surprise.

However Dorks’s entrepreneurial origins are more modest, having bootstrapped the Plumtree Group to acquisition by Ideagen back in 2012.

BOOTSTRAPPING

“I funded it through a very large mortgage, which was then remortgaged! We used credit cards… Mum and Dad also remortgaged. We just did it that way and got to around 35 staff in total,” he recalls to TechBlast.

“By the time we went through the 2008 and 2009 challenges, as everybody else did, I realised that the next time we did this I wanted to do it a different way.”

Dorks says that in a ‘lifestyle’ business such as this “you’re limiting your ambition and pace”, adding: “A lot of it comes down to your risk profile. Are you prepared to keep turning the dial and risking it all again on black or red?”

The CEO describes the Plumtree years as “the hardest and most enjoyable period of my life”. 

“We were focused on selling technology into healthcare, primarily around document management and order comms – ordering blood tests and radiology tests online. We did really well: we had around 100 hospitals using it,” he says.

“But building a business up around selling to hospitals who work 24/7 when there’s just 15 of you… it was pretty much a 24/7 job, answering support calls, going out to see customers, selling and product management.

“In technology, product is still so important: making sure you’re able to invest into the product while also needing to spin all of the other plates is really challenging. The stress of cash on a week-by-week, month-by-month basis is also something that sits there, very much at the top of your head, each and every day.

“It was great to be part of and an exciting time. I’m pleased that some of the people from Plumtree are still here at Ideagen today – I think it shows that we got a lot of things right in terms of our purpose and our culture.”

JOINING IDEAGEN

David Hornsby, who led Ideagen from 2009 through to Dorks’s appointment as CEO in 2018, came calling – and Dorks did not hesitate.

“He said: ‘I’d really like to buy you, we’re strengthening our regulated software position and healthcare is a really big growth market for us.’ He named a price, which matched what I had in my head already,” reveals Dorks.

“I wanted a new personal challenge. I wanted to see if I could achieve bigger and better things. That’s why it was also the right time.”

Ideagen had floated months before he joined and he quickly established himself as integral to its operation, serving as sales and marketing director then chief customer officer before taking over the top job.

“I’m a very driven individual. I came into Ideagen as a place I could build a career. I felt that I could learn a hell of a lot from [David] – and I did,” says Dorks.

“My philosophy has always been: at the point that David says that he’s leaving, everybody in the business and externally just goes ‘it’s going to be Ben, isn’t it?’ 

“I would always ask for more responsibility, more accountability. And it just became a bit of an inevitability that I would become CEO. But it was absolutely something I always wanted.”

Ideagen’s software helps companies comply with regulation and manage risk. It serves more than 8,000 customers, including Heineken, British Airways, the US Navy, the Bank of New York and the European Central Bank.

It counts seven of the UK’s top 10 accounting firms, three quarters of the world’s biggest pharmaceutical companies and all of the world’s top aerospace and defence companies among its client base.

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LONELY JOB

Acknowledging that the leader of a ‘lifestyle’ business  would have a better work-life balance, Dorks says that “being a CEO is a very lonely place to be”.

“It’s natural,” he explains. “Under the leadership of Ideagen we’ve grown from a couple of hundred people to 1,000 people today. You’re trying to create a culture where employees love their work and they’re inspired and they’re striving for to be the best and for excellence and growth – and you’re trying to create an environment that’s all about an adventure. 

“On the flip side, we’re a publicly listed company and I have a fiduciary responsibility to our investors and I have to make lots of difficult decisions. Sometimes those difficult decisions are ones you make on your own.

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“Talking and sharing with other business owners has been such a fundamental part of how I’ve got to where I am. So however dark the day seems, trying to build a network of people that you feel you can pick up the phone to, talk to and ask questions of is just essential. 

“Lots of people have lots of great ideas. I’m a huge supporter of cognitive diversity – getting people from different backgrounds and different industries and talking through those things, you often get some real pearls of wisdom.

“I also think it’s really important to have people outside of your work that make you realise that you’re still the same kid who went to school and can take the mickey out of you and all the rest of it. You definitely need that in your life.”

NOTTINGHAM FOREST

Enter Nottingham Forest. If – like Dorks – you are fanatical about the grand old club, you will have seen Ideagen sponsorship around the City Ground.

The company also recently partnered with the Nottingham Forest Community Trust to launch ‘Think Big’. Dorks expects the company to deliver presentations to about 8,000 children in schools this year, with a view to encouraging them into technology careers.

He says the association with former European champions Forest – set to play Sheffield United in the first leg of the Championship playoffs this weekend following a resurgence under manager Steve Cooper – results in a higher number of applicants to the business.

“Building this business in my own backyard where I grew up, and being able to support the community in which I grew up is a hugely important reason as to why I’m still so driven to make this business a super global success,” he says.

“We specifically work with kids that fall into ‘needs’ – those kids at 16 who aren’t in employment educational training – and we focus special courses on them and put them into apprenticeships.

“We have pledges for about 70 apprenticeships a year: we do about a dozen and there are other CEOs of mid-size businesses in Nottingham whom I’ve cajoled, shouted at and pushed into also taking a few. 

“We use Forest as the vehicle to be able to do that. They have been tremendously supportive of that programme throughout.”

Dorks is optimistic about Nottingham’s prospects as a technology centre. “One of the biggest tech companies in the world is based on its doorstep – Experian – and it has two fantastic universities,” he explains. 

“There’s a growing and developing tech scene in Nottingham: you’re starting to see some really exciting and emerging startups, with organisations like UNiDAYS doing really well. 

“Hopefully, we can encourage more people to stay in Nottingham post-university and be part of the city.”

He will also be hoping that Ideagen, which employs 700 people worldwide, is not the only Nottingham institution making headlines in the coming weeks as Forest seek a return to the Premier League for the first time in 23 years

We’ve got a world class cricket ground in Trent Bridge – and a world-class football team!” he says optimistically.