We are pleased to announce the sale of Shackleton portfolio company DEM Solutions to Altair Engineering Inc., (Nasdaq:ALTR). This is our 21st profitable exit.
DEM Solutions’ lead product, EDEM, is the market-leader in Discrete Element Method (DEM) software for bulk material simulation. Blue-chip companies around the world also use EDEM to reduce costs of operations, shorten product development cycles and drive product innovation. In addition, EDEM is used for research at more than 300 academic institutions worldwide.
Shackleton originally acquired a significant interest in DEM in April 2014 as part of a portfolio of 13 assets. At the time the company was making significant losses. The following year, with DEM under new leadership, Shackleton invested further funds alongside co-investors to support a turnaround and growth plan, under the code name “Trossachs”, one of Scotland’s many beautiful regions.
Since then the company has achieved commercial beauty by consistently growing revenues by 15-20% per year and moving into EBITDA profitability. DEM’s success has been driven by a continuing stream of innovative new developments, close attention to customer service and effective marketing worldwide. DEM is a truly international business, with 94% of revenue coming from outside the UK and sales in 54 countries, while its employees, who have doubled in number since 2014, are drawn from 17 nationalities.
Hugh Stewart, Managing Partner of Shackleton Ventures, commented: “We are delighted to have been part of the DEM story. Ian (Williamson, CEO) and his team have done a great job in building DEM into a world leader, consistently setting ambitious growth plans and actually meeting them. It has been a pleasure to work with him and the rest of the DEM management team and we wish the company and the employees the best in this next chapter in their history.” Ian added: “We have benefitted hugely from working with Shackleton who have been extremely supportive of the management team as we executed on our new strategy after 2014. Shackleton achieved the perfect balance by not meddling in the day-to-day operation but by being actively involved at the board and always being there to help when big decisions were being taken.”
Shackleton’s investment in DEM was from its third fund, Shackleton Secondaries 3 LP, formed in 2014. This fund has achieved top quartile returns, consistent with all four of Shackleton’s principal funds. In total, including DEM, Shackleton has had 21 profitable exits since its formation in late 2006.
Altair is a global technology company providing solutions in product development, high-performance computing and data analytics. Altair’s leading solutions for machinery and materials simulation will be strengthened with the addition of EDEM for bulk materials simulation by offering new tools that can provide insight to the interaction between materials such as pellets, tablets, powders, coal, soil and rocks with machinery. This systems-level simulation capability will provide critical insights for optimizing machinery design, material handling and manufacturing efficiency in a broad spectrum of industries including pharmaceutical, chemical and food processing, agriculture and heavy engineering such as mining.
