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Chapters Group revenues have topped $100M. What does it actually do? 

Hint: not only VMS!

Disclaimer. The author maintains an interest in the shares of Chapters Group AG. None of this is investment advice

Europe isn’t short of homegrown tech aggregators. However, few are as prolific - or as difficult to describe as the Hamburg-headquartered Chapters Group.

Led by the charismatic CEO Jan-Hendrik Mohr, in a little over 5 years Chapters (formerly known as MEDIQON and before that, Medical Columbus) has been transformed from a forgotten small-cap to an M&A powerhouse with 40+ acquisitions under its belt.  

Since 2019, Chapters has deployed c.€120M of capital to create c.€25M of asset level EBITDA (excluding the Software Circle stake).

Chapters’ share price is up 6X in 6 years.

But what exactly is it? A listed VMS HoldCo? An evergreen hedge fund? 

We would argue, a bit of both. Chapters’ has nailed two crucial aspects of a rollup:

  • Raise common equity from long-term US investors at premium multiples (Sator Grove, Mitch Rales AND the MIT endowment are its top 3 shareholders)

  • Have majority owned platforms deploy this capital, mixed in with cost competitive bank financing - into acquisitions of profitable, mature European businesses

Genius, right? What’s the secret sauce?

Read on to find out:

  1. How Jan-Hendrik Mohr gave Medical Columbus a second lease of life

  2. Chapters’ investment strategy: what businesses they have bought and how much they have paid (behind paywall)

  3. How Chapters structures platforms: case study of CarMa (behind paywall)

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But first, the backstory

You’ve got to love those insight packed Sator Grove podcasts! Rick and Paul interviewed Jan back in November - and boy did they get a proper download. 

We won’t recap the whole episode here (conveniently, a free transcript is available), but here are the highlights: 

  • Jan is a dye-in-the-wool value investor who has been coming to Berkshire Hathaway AGMs since he was 17. It was in Omaha that he caught the eye of Norman Rentrop, a German publisher / fund manager who runs the investment company Investmentaktiengesellschaft für langfristige Investoren TGV. According to TGV’s website, “it now serves over 430 family entrepreneurs to participate in companies”, with assets well over $1B. It was Norman that gave Jan a pot of money to manage in 2015, shortly Jan graduated with a Masters degree

  • In 2018, Jan’s fund JMX picked a block in Medical Columbus, a down-but-not-out provider of healthcare procurement software for providers and suppliers. A Frankfurt listed penny stock whose valuation had never recovered from the dotcom bust. But which was about to sell its core business for €19M to a US buyer

  • Dirk Isenberg, the founder of Columbus, was going to distribute the proceeds…luckily, Jan talked him out of it! This is where things get really interesting. In 2019, Jan used the cash to seed two AcquiCos, Ookam and NGC Nachfolgekapital

  • The following year, Jan became CEO. He was 31 at the time. More capital raised, more AcquiCos founded, and finally the rebranding from MEDIQON to Chapters Group

Source: Chapters Group

What does Chapters actually consist of?

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