London-based IP Group has sold portions of its portfolio for £15m, enhancing its buyback strategy.
- Shares in nine portfolio companies were sold at a slight premium to earlier valuations.
- CEO Greg Smith cites new relationships and quality validation of the portfolio.
- Since January, IP Group has garnered £57m from portfolio exits, signalling a valuation rebound.
- Expected sales from Featurespace could yield an additional £134m.
London’s tech investor IP Group recently executed a strategic sale within its portfolio, raising £15 million. This financial manoeuvre is aligned with the company’s effort to expand its share buyback initiative to a total of £45 million. IP Group’s decision involved offloading shares in nine of its portfolio entities. These transactions were conducted at a ‘small overall premium’ to the companies’ valuations earlier in the year. Collectively, the shares sold represent less than 10% of the firm’s total holdings in these companies, showcasing a cautious yet beneficial divestment strategy.
The stock market responded positively, with IP Group’s share price elevating by 3.7% to 50 pence during early trading hours in London. Greg Smith, the Chief Executive Officer, remarked on the significance of the transaction. According to Smith, the sales fostered new connections with long-term investors and reaffirmed the strength and valuation methodology of the Group’s diverse portfolio. “This transaction creates new relationships with a group of long-term investors and further validates the quality of the Group’s portfolio and our valuation approach,” Smith stated.
Throughout the year, IP Group has effectively generated substantial cash through portfolio exits, consistently achieving or exceeding carrying values from these divestitures. The board’s stance is that the current stock price does not fully reflect the Group’s true portfolio value, prompting a strategic allocation of all proceeds from recent sales into its ongoing buyback programme. With these latest sales, IP Group has accumulated around £57 million in cash proceeds from exits since January, marking an approximate 50% increase compared to figures from 2023. This uptick is indicative of a resurgence in the valuations of startups.
A notable future transaction includes the anticipated proceeds from the sale of Featurespace. This enterprise specialises in innovative artificial intelligence technology for real-time payments protection and was acquired by Visa in a recent deal. The expected revenue from this sale is substantial, potentially adding another £134 million to IP Group’s financial gains.
As of the end of November 2024, IP Group’s financial status comprised £176 million in gross cash and deposits. Additionally, their stakes in listed entities were valued at £167 million, which together constituted roughly 80% of the company’s market capitalisation at that time.
IP Group’s strategic asset management and divestment efforts reflect a robust approach to enhancing shareholder value.
