By Charlie Conchie
An Irish tech ‘unicorn’ has ruled out a potential London IPO after a bitter spat with FTSE 100 private equity giant Intermediate Capital Group (ICG), which holds a ten per cent stake in the firm, City A.M. has learned.
Workhuman, a Dublin-based software company valued at $1.2bn in 2020, has been embroiled in a dispute with ICG since March last year when the investor allegedly blocked an acquisition at the eleventh hour and tried to boost its own influence over the firm.
The two companies have been locked in court battles in London and Dublin as ICG attempts to prevent Workhuman chair and largest shareholder Barry Maloney from paying off a debt and redeeming its equity stake in his holding company.
According to London court filings from Maloney, ICG is disputing his claim and argues that any capital reduction requires its consent. A spokesperson for ICG declined to comment yesterday due to “ongoing legal proceedings” but said it “refutes all claims.”
The spat has now led bosses at Workhuman to rule out London as a potential destination for an IPO due to the level of animosity between the firms, a source close to the company told City A.M.
“Given the company is likely to have to make another decision on where to do their IPO, this experience with ICG will have ruled out London,” the source said. “ICG’s behaviour here is the antitheses of how US institutions work to help build, support and grow the businesses of the founders they back.”
The firm previously filed to float in the US last year but pulled back due to the still volatile state of the market. Both London and New York were understood to be in close contention at the time but bosses have now ruled out the UK if it revives its plans.
Workhuman was founded as Globoforce by its chief executive Eric Mosley in 1999 and has grown into one of Ireland’s tech success stories, fetching a so-called unicorn valuation in 2020 and turning over $1.34bn in 2022.
The severance of the relationship between Workhuman and ICG has been complicated by the complex financing ties between the private equity outfit and Workhuman chair Maloney.
ICG provided Maloney with financing in 2018 to buy a forty per cent stake in Workhuman through his holding company Falcon, giving ICG a seven per cent equity stake in the Jersey-based vehicle. In 2020, ICG then separately bought a ten per cent equity stake in Workhuman via another of its funds.
London-listed ICG has some $81bn in assets under management and has climbed in value over the past year, winning promotion to the FTSE 100 last month.
The relationship between the companies soured rapidly however after ICG’s move to block the acquisition of a US-based firm, in what Maloney described in court documents as an attempt to “extract maximum value” from Workhuman.
The FTSE 100 firm had initially introduced the acquisition target, but as a condition of its approval then allegedly pushed for a restructuring of its stake which would have ranked it as senior to all other creditors and shareholders.
Such a restructuring deal would have loaded $425m worth of debt at a time when it only had $23m on its books.
The two firms are next set to meet in the Irish courts later this month.
