Below are the transactions Ian Smith and Tony Weaver completed prior to the formation of MXC and then from August 2014 and following our Admission to AIM in October 2014, MXC’s track record in its own right to date.
We are focussed on building two complementary investment themes. First, we are creating a small number of principle investments – probably around eight of them - that are quoted platforms for growth by acquisition. These businesses either are or hopefully will become significant businesses in their segments with upper quartile ratings and capitalisations approaching the mid-market.
Organisations are amassing vast quantities of data from their own as well as third party sources, which brings with it a requirement for them to store, manage, clean, analyse and extract value from this Big Data. This has created a big business opportunity. Data analytics is rapidly becoming critical to business success and organisations - especially ones in data-intensive industries – are hungry for ways to interpret and create insights not immediately visible or simply impossible to find using traditional methods. Analytics focuses on finding these hidden threads, trends or patterns which may be invisible to the naked eye, but yield actionable, business changing insights.
Sometimes considered the Cinderella segment of the IT market, Managed Services (essentially, IT and telecoms infrastructure support services) continues to provide a rich opportunity for supplier restructuring and consolidation, particularly in the mid-market. This segment, part of the £14bn UK infrastructure services market,* (*Source: TechMarketView) offers the potential for multi-year contracted recurring revenue streams and ‘sticky’ customers who become reliant on their Managed Services supplier to support their increasingly complex IT environment, especially as they introduce cloud-based and mobile apps into the mix.
GOVERNMENT AND PUBLIC SECTOR
Never has the UK government been more open to including SME IT companies into the supplier mix, both directly and in partnership with large scale systems integrators. Initiatives such as ‘G-Cloud’ make it easier for small IT companies to compete for a slice of the £11bn public sector software and IT services pie* (*Source: TechMarketView) and introduce modern technologies with rapid implementation cycles throughout central, local government and other public sector institutions.
The so-called Internet of Things (IoT) opens up the traditional world of highly technical sensor-based systems to wider commerce and into the consumer marketplace. There are almost limitless opportunities for IT companies to provide products and services throughout the IoT ‘value chain’, from innovative tech hardware firms building smaller, cheaper and more functional sensors, through to enterprise-grade ‘big data’ software systems to process and interpret the sensor data, and mobile apps to provide an intuitive ‘user experience’.
Automation software has been available for many years to simplify the operation and management of IT systems and networks. Now a new generation of software robotics start-ups are applying sophisticated artificial intelligence techniques to create applications which are capable of minimising – even eliminating – human intervention from repetitive business processes, particularly labour-intensive paper-based clerical activities. This Next Generation Business Process Automation offers the potential for dramatic savings in labour costs and significant improvements in process quality and output accuracy.
Malicious intrusion has arguably become the most prolific and insidious threat to IT networks, computer systems and software-controlled machinery and equipment (which is almost everything nowadays!), especially as they become increasingly accessible over the internet. The cost – both financial and reputational – of falling victim to a cyberattack can seriously impact a business. A vast array of tools are required to prevent, detect and recover from intrusions, which need to be constantly enhanced and upgraded as the nature and sophistication of the threat shifts and changes.
Financial services companies are under intense pressure to differentiate themselves from traditional competitors and new entrants, while materially reducing operating costs. This is a huge challenge for the many whose core IT systems were built years, if not decades, ago. With a UK financial services software and IT services market worth nearly £11bn and growing faster than GDP* (*Source: TechMarketView), there is no shortage of opportunity for suppliers of innovative technologies that can build upon entrenched legacy systems to enable financial services companies to reduce the time to launch new, profitable, market-relevant products and services.
Internet Service Providers (ISPs) have moved well beyond the provision of basic connection to the internet to include a range of higher margin value-add services as part of their proposition. These services can extend from basic website and application hosting through to fully managed services providing computing power, data storage and network bandwidth ‘on tap’.
MXC’s model will always be flexible, allowing us to invest beyond our themes and sectors. Our main driver is to build value for our shareholders and we will pursue that value wherever we believe we have identified it.