Metric Capital Partners’ exit from BeeDigital generated around 4x MOIC from the EUR 30m investment it made in 2017 after a massive digital transformation play, managing partner John Sinik said.
The hybrid capital solutions provider announced the sale of the business to Spanish private equity and real estate manager GPF, marking the end of a nine-year hold defined by a full operational transformation.
Originally a legacy Yellow Pages advertising business, Metric repositioned BeeDigital into a digital marketing platform serving Spanish SMEs.
BeeDigital was originally part of Telefónica's Yellow Pages business, which was later sold to Hibu (formerly known as Yell Group) as part of an international expansion. After Hibu became heavily leveraged and underwent restructuring, control was passed to credit hedge funds, Sinik said.
At the time BeeDigital was looking for an owner that could meaningfully transform its operations, and Metric, alongside Evolvere Capital, assumed a loan-to-own position to acquire the business, with the hedge funds having already completed the mechanics needed for the takeover, he said.
Despite initial LP perceptions around acquiring a “dinosaur” business, Metric’s investment thesis was solidly built on downside protection, where losing money would not have been possible, the executive said.
Given the low entry valuation, Metric believed cashflows from the print directory business alone would be sufficient to repay the investment within a few years, despite ongoing decline in print.
“Making a lot of money was to be determined, but losing money wasn’t,” Sinik said.
“That's even including the inevitable decay in terms of companies advertising in the yellow pages. We assumed a very sharp decline, yet, we struck such a good deal that a couple of years of print cash would repay 100% of our investment. That’s exactly what happened,” he added.
Then came the question around digital transformation. This was led by Diego Prada, managing director of Metric’s portfolio team, who stepped in as chairman of BeeDigital.
The team approached BeeDigital’s existing client base, which at the time included around 75,000 Spanish SMEs who still relied on ‘Páginas Amarillas’ or the Yellow Pages. Prada then began to reposition BeeDigital as a partner in their digital transition.
BeeDigital became a one-stop platform for everything from Google advertising, to website creation and social media campaigns. It also switched from once-a-year renewable subscriptions to one with automatic renewals.
Metric had explored bolt-ons but ultimately decided not to execute any after finding it hard to source targets with the distribution network that matched BeeDigital’s. “We never really felt comfortable acquiring any of them – we felt that whatever the companies did, we could do ourselves, or resell at favourable terms,” Sinik said.
It then scaled distribution by building partnerships with large telco companies already serving SMEs, such as Vodafone, Mastercard and Telefónica.
Much of BeeDigital’s growth came from those partnerships, Prada said in a joint interview, as telcos were looking to diversify from their core business as margins were shrinking and customer loyalty was low.
“We gave them something that their SME clients were very excited about. It allowed them to generate customer loyalty, which is something they really struggled to do — drive sales and keep up with the technologies that help them sell,” Prada said.
On top of that, BeeDigital also benefited from the Digital Toolkit Project, an EU digitalisation subsidy programme that helped SMEs adopt digital tools at little or no cost, Prada said. This provided a significant boost during those years, further accelerating growth, he added.
The exit timing was shaped by both investment maturity and forward-looking considerations for the business.
“Four times money is a great result, but after nine years, it was time to exit,” Sinik said. “The world is at a crossroads with AI, and BeeDigital now has an opportunity in that space, it’s the next chapter for the business.”
Metric had previously explored a sale in 2023 and in 2024, as previously reported by Mergermarket. The GP opted to hold the asset longer as the market failed to fully price in growth from the EU subsidies, Sinik said.
Following the exit, the next phase for BeeDigital should focus on delivering AI solutions and international expansion. Capturing that would take several more years, an evolution better suited to GPF’s ownership, Sinik said.
Metric manages EUR 3.7bn in AUM and 49 investments across Fund I to Fund V, with six European offices and over 28 portfolio companies, according to its website.
The GP is approximately 65% committed through Fund V and records a blended IRR of around 26% alongside a 2:1 ratio of distributions to capital called.
The team expects to stay on track and come back to market with Fund VI within the next six to nine months, Sinik said.
cloud technology axon
Substrate AI serves more than 500 customers across sectors including h...
