Our Corporate Finance team has successfully advised mid-market private equity firm LDC and unified technology solutions provider Babble, on the sale of the business in a secondary management buy-out backed by Graphite Capital Partners (“Graphite”).
Babble provides unified technology solutions for more than 2,000 small and mid-sized businesses. The company’s services include cloud collaboration and communications, cloud contact centres, cyber security, mobile and enterprise connectivity.
The team supported LDC through the original buyout of Babble (previously IP Solutions) in 2017. During its three-year partnership LDC provided nearly £9million of follow-on funding to support six acquisitions. In that time, the firm increased turnover by 230% and headcount by 200%.
A successful buy and build strategy has helped the business to expand its product portfolio, extend its geographic footprint across the country and consolidate its position in the UK’s unified communication market. Babble made two acquisitions in the first year of the partnership with LDC including Birmingham based Arden Group, a deal which the team also advised on, and a further four deals in 2020.
This year the team were appointed by LDC and Babble to conduct a full sales process, which involved finding a suitable private equity partner to back Matt Parker’s vision for the future growth and buy and build strategy, in support of the secondary buy-out. In addition, the team debt advisory team undertook a comprehensive lender education process to support the private equity bids and demonstrate the strong appetite for deal support from debt providers.
Simon Davies, Managing Director of our Corporate Finance team said, “This has been a really successful process with a great team approach adopted by LDC, Management and the team, who worked tirelessly and collaboratively to ensure the business was positioned in the best possible way to maximise interest and value. Matt has a clear vision for the future, and we are absolutely confident that he and his team will deliver on that. This is the largest sell-side role for PE undertaken by the team and illustrates the depth and quality of resource and shows how far we have come in the past 10 years.”
Working to a tight timescale the team conducted a focused process resulting in an exceptional deal for all parties with Graphite securing the deal at a £90m valuation to support the next exciting stage of Babble’s development. LDC has retained a minority stake in the business to support its continued growth. The team worked alongside Gateley (Legal), Analysys Mason (CDD) and RSM (FDD) to close this transaction.
Matt Parker, CEO of Babble, said: “When we chose to partner with LDC as our private equity backer in 2017, we were looking for a team with experience of working in our sector, but also one committed to supporting our acquisition strategy. LDC bought into our vision and backed us as a team to deliver it. The last three years have been transformational for Babble and we are well on our way to becoming a £100million revenue business. We’re pleased LDC is staying with us on the next stage of our growth journey.”
“The team were remarkable throughout this process, helping us to understand that pre-process work was key and making that as painless as is practical. Once the process started they were permanently on hand to guide, advise and cajole everyone on all sides and did more than their fair share of the heavy lifting.” Matt Parker, CEO of Babble.
“Babble is an extraordinary success story, and we are delighted with the outcome of this transaction. The team’s support from the initial investment in 2017, acquisition journey and subsequent exit has been invaluable. They have worked exceptionally hard to complete this transaction and achieved a great result for everyone involved in the process. We have a long-standing professional relationship with the team, they are extremely skilled and well-connected advisers who dedicate 100% on every transaction. We are in no doubt that we made the right choice appointing The team to deliver on this transaction.” Yann Souillard, Head of London at LDC.
“We’ve been on a remarkable journey with Matt and his management team. Strong organic growth has been supported by a buy and build strategy that’s transformed the business and expanded its product portfolio. We’re looking forward to continuing to work alongside the team and the new investors to support their ambitious plans.” Chris Morris, Investment Director at LDC in the South.
Technology, Media and Telecoms (TMT)
The team were remarkable throughout this process, helping us to understand that pre-process work was key and making that as painless as is practical. Once the process started they were permanently on hand to guide, advise and cajole everyone on all sides and did more than their fair share of the heavy lifting.Matt Parker CEO of Babble