Causeway Technologies receives £120m private equity funding
Causeway, a leading provider of enterprise and cloud software solutions to the construction and infrastructure maintenance industries, has secured a £120 million investment to fund strategic acquisitions and accelerate its organic growth strategy to digitally connect the construction supply chain through further development of its cloud platform.
This investment follows a period of strong and consistent growth at Causeway, resulting in an earnings compound annual growth rate of 31% since 2015, driven by increased industry adoption of digital solutions and acquisitions that have broadened its product portfolio.
Five Arrows Principal Investments, the European corporate private equity arm of Rothschild & Co, have made this investment in return for a significant minority stake in the 22-year-old company.
This investment reinforces the opportunity in this sector and the need for solutions that address both the pace of digitalisation and productivity issues caused by complex supply chains, and the transient nature of construction projects. Causeway’s solutions connect the construction ecosystem, providing solutions that transcend functional and organisational boundaries.
Phil Brown, Chief Executive and Executive Chairman of Causeway, said the investment marks another leap forward for its business. "Our core purpose and passion is to digitally enable the global construction industry – the support of Five Arrows allows us to accelerate our work to help solve our customers’ challenges. Our ambition is to ensure that data flows seamlessly across the construction process, making our customers more efficient and their data more useful and actionable. That is the only way to drive better project outcomes, especially around value and quality."
He added that while cloud-based tools and mobile connectivity have helped put solutions into people’s hands, the industry remains very fragmented.
"We are building a persona-based platform with relevant applications and data delivered to each member of the construction supply chain via their desktop or mobile devices. The platform will be open, making it easy to integrate with both third-party applications and any bespoke, customised applications that customers might have had developed. This approach will help break down silos and give businesses large and small, in all parts of the construction ecosystem, complete visibility and control over their projects and supply chains.”
Following completion of the transaction, Vivek Kumar (partner) and Sacha Oshry (managing director) of Five Arrows Principal Investments will join the board of Causeway. Goldman Sachs served as financial adviser to Causeway Technologies and Torch Partners acted as financial adviser to Five Arrows.
Headquartered in Buckinghamshire in the UK, Causeway serves over 2,500 customers and has over 350 employees, providing enterprise and cloud software solutions to the construction and infrastructure maintenance industries and full value and supply chain.
Private equity deals are rising globally in the construction and energy sectors.
Brookfield is acquiring Modulaire Group from its shareholders, which include investment funds managed by TDR Capital, a leading UK-based private equity firm. The transaction, which is subject to customary regulatory and competition clearances, is expected to close in Q4. For the three months to March 31, the group delivered total revenues of €320 million, up 27% year-on-year, and organic EBITDA increased 28% to €78m.
ToolWatch Corporation, which provides tool and equipment tracking and operations management software for the construction, utilities, and oil & gas industries, has received an investment from The Riverside Company, a global private equity firm, which positions ToolWatch for accelerated growth.
This month also saw Ara Partners, an industrial decarbonisation-focused private equity firm, buy Anesco Holdings, the parent company of the Anesco Group. Terms of the transaction were not disclosed.
BT and Microsoft unveil strategic partnership
BT and Microsoft have launched a strategic partnership to accelerate innovation across enterprise voice, cyber security and industry-focused services in sectors from digital manufacturing to health.
BT has already been named one of the first development partners for Microsoft Operator Connect and Operator Connect Conferencing. The renewed agreement will allow BT to build on this relationship and offer its own branded global managed voice services directly through Microsoft Teams, with an approach that further enhances customer experience and creates new opportunities for growth.
The strategic partnership will build on BT’s existing portfolio of cyber security services built on Microsoft technology. It will see the companies push forward with the design and launch of a new generation of managed security services to enable and protect the modern collaborative workplace. BT will work closely with Microsoft to develop distinct security propositions to defend customers’ operations across the cloud as well as its own IT estate.
Sustainability and collaboration on digital skills are integral to the partnership. BT and Microsoft will work together on further enhancing sustainability credentials within their supply chains and join forces on promoting digital skills in the communities.
“BT and Microsoft are at the forefront of innovation in global digital platforms and connectivity that will take technology and communication beyond limits,” said Bas Burger, CEO of Global at BT and executive sponsor of BT’s partnership with Microsoft. “This partnership will ensure all of Microsoft’s solutions work ‘Best on BT’ and support both companies’ commitments to improving digital skills in the community.”
Omar Abbosh, corporate vice president of industry solutions at Microsoft, said: “BT can use Microsoft’s cutting-edge tools to develop new communications services that meet the needs and demands of today’s customers. By aligning our visions for communication, connectivity, security and digital technology, Microsoft and BT will support real growth for businesses across the world.”
Microsoft's vision is to transform construction and built environment businesses with design innovation, a supply chain you can control, and a connected, safer, more productive workforce.
Microsoft recently unveiled strong results for the quarter ending June 30:
- Revenue totalled $46.2 billion, up 21%
- Operating income was $19.1 billion, up 42%
- Net income was $16.5 billion, up 47%
- Diluted earnings per share was $2.17, up 49%
For the year, revenues totalled $168.1 billion (up 18%), operating income hit $69.9 billion (up 32%), net income was $61.3 billion GAAP and $60.7 billion non-GAAP, and increased 38% and 37%, respectively.
“We are innovating across the technology stack to help organizations drive new levels of tech intensity across their business,” said Satya Nadella, chairman and chief executive officer of Microsoft. “Our results show that when we execute well and meet customers’ needs in differentiated ways in large and growing markets, we generate growth, as we’ve seen in our commercial cloud – and in new franchises we’ve built, including gaming, security, and LinkedIn, all of which surpassed $10 billion in annual revenue over the past three years.”
In a trading update last month, BT reported profit after tax £2m, down £446m, due to a "one-off tax charge in the quarter to reflect the remeasurement of deferred tax balances following the enactment of the new UK corporation tax rate of 25% from April 2023".