Palamon Capital Partners has acquired a majority stake in UK-based Thomas International, a provider of psychometric assessment solutions with a focus on small to medium-sized businesses. No financial terms were disclosed.
Palamon Capital Partners (“Palamon” or the “Firm”), a pan-European growth investor, has acquired a majority stake in Thomas International (“The Company”), a leading international provider of psychometric assessment solutions with a focus on the small and medium-sized enterprise (SME) market. The terms of the transaction were not disclosed.
Thomas International is a leading provider of online psychometric assessments, consulting, and related products and services. Founded in 1981 by the Reed family, the Company has been at the forefront of assessment innovation for more than 37 years, helping SMEs to recruit, develop, and retain talent. Headquartered in the UK, the Company has 81 offices globally with over 75% of sales originating from international markets. More than 2 million Thomas International assessments are completed each year across over 60 countries and in 56 languages. The Company generated gross sales of £40 million and pro-forma EBITDA of £9 million during 2017.
Following the acquisition, Thomas International’s CEO Amir Qureshi will continue to lead the business, while Martin Reed will stay on as a non-executive director for the Reed family. Ricardo Caupers and Ali Rahmatollahi will join the Company’s Board as representatives of Palamon.
The acquisition of Thomas International stems from Palamon’s investment thesis in the substantial growth opportunity that exists for data, analytics and software solutions that enhance operational efficiency and effectiveness of SMEs. Thomas International, one of the leading platforms in the $3 billion global psychometric testing market, presents an attractive opportunity to rapidly scale a digital platform offering reliable, lower-cost, easy-to-use software and solution tools.
Ricardo Caupers, Partner of Palamon Capital Partners, said, “Thomas International is extremely well positioned to benefit from the growing focus of SMEs on reducing staff recruitment and retention costs by making better hiring decisions, improving talent development, boosting staff engagement and increasing employee retention. We look forward to supporting the Company in making its products a key element of best in class HR management processes in SMEs across the world.”
Ali Rahmatollahi, Partner of Palamon Capital Partners, said, “The Reed family has created a unique business, with a tremendous digital product, a strong and sticky customer base and a valuable global footprint. The runway for growth in psychometric assessment usage, especially among SMEs, is huge and we are delighted to partner with Martin, the Reed family and management to help accelerate Thomas’ growth and journey to become the pre-eminent provider of psychometric software and solutions globally.”
Martin Reed, Chairman and founding family member of Thomas International, said, “I am incredibly proud of the business that my family and staff have built over the last 37 years. Our company has always put its own people at the heart of everything we do and, equally, our assessments and the insights they provide have always been about empowering businesses to transform the performance of their people, teams and culture. At Thomas International we pride ourselves on fostering a culture of innovation. My family, management team and I are confident that in Palamon we have found the perfect strategic partner to help us continue to drive the Company forward.”
Amir Qureshi, CEO of Thomas International, said, “I feel very privileged to be the CEO of such a great company and I want to thank Martin and his family for their support over the last few years. We have grown strongly over that time across the world and yet still see a significant untapped market for our core products. My team and I are incredibly excited to be working with Palamon, who have extensive experience in working with high-growth, technology-driven service companies, to take this business to new heights.”
Thomas International is the seventh investment from Palamon’s third fund, which closed last year above target on €402 million of commitments. Other investments include Business School24 SpA, the education and training unit of Il Sole 24 ORE S.p.A, Italy’s leading business newspaper; Italian leather accessories brand, Il Bisonte; International payments provider Currencies Direct, and global sock brand, Happy Socks. Palamon uses a proactive thematic sourcing approach to find growth investments across the European lower mid-market and has invested more than €2.2 billion in 39 companies across 10 countries.