TRC Corporation

SCADAgroup is a provider of systems integration solutions and supervisory control and data acquisition (SCADA) products to water utilities and oil & gas businesses. These solutions allow SCADAgroup’s clients to monitor and control their valuable infrastructure assets, meet legislative and regulatory standards, and improve safety, efficiency and security of supply.

SCADAgroup (formerly Serck Controls) was founded by the Group Managing Director, Paul Chisholm, in 1994 when it was part of Hunter Valley Water and now operates internationally, with significant operations in Australia, UK, Europe, Canada, USA and South America and services other regions from these outlets.

Advent was attracted to the SCADAgroup investment opportunity on the basis of the following:

A reliable revenue stream in providing SCADAgroup and process control applications to the Australian and UK water markets, given that very few customers change suppliers once products are embedded
Growth in SCADAgroup’s key water and telemetry markets in Australia and the UK, driven by a need for improved functionality, upgrade cycles, new technology, as well as growth in new sectors such as environmental monitoring and oil & gas
The potential to enhance margins, turnover and EBIT by changing the products and service mix to a stronger focus on products
Company founder and CEO with extensive background in the SCADA industry and supporting a strong management team.

Advent's investment in SCADAgroup in March 2006 funded the replacement of the existing private equity investor and enabled management to continue with their growth strategies for the business.

On the investment by Advent, SCADAgroup was predominantly a service business with some proprietary products and software generating approximately small revenues.

The following outcomes were achieved by management and Advent in developing SCADA into a strategic asset for exit:

Enhanced reporting regime providing better planning and accountability enabling concentration of growth areas and improving forecasting
Developed strong markets and closed struggling markets - closure of the Dubai and Luton operations, subsequently serviced from other offices and integration of other operations as well as the opening of sales offices in the USA, Holland and South America, providing access to new markets and increased exposure to the growing oil and gas sector
Shifted focus to a products business, reducing reliance on services and significantly lifting revenue, margins and market offerings
Acquisitions of 100% of the shareholding of Control Micro Systems (CMI), a Canadian based company in which SCADAgroup already maintained a 25% holding. This acquisition was funded by additional equity, mezzanine debt and Advent introduced Advent V as an equity partner at this stage Acquisition of other strategic assets - Trio Datacoms, Adaptive Instruments and Accutech
Centralisation of international R&D department and greater management control over the R&D plan and budget
Appointment of new GM to the Australian and UK operations, immediately lifting Aust performances

Supported by Advent, the management teams successfully integrated acquisitions while supporting the organic growth of the business and the group’s EBIT trebled over a 4 year timeframe.

Advent and management jointly drove the exit program. Advent worked alongside management to ensure the best possible outcome for investors while ensuring that management remained committed and incentivised to achieve the right outcomes. Advent's IRR on its investment was 60% for Advent IV and 44% for Advent V%, delivered primarily through earnings growth and multiple uplift. The blended money multiple was approximately 7 and 3 respectively for Advent IV and Advent V.