WESTBRIDGE Capital has completed a £10.5m secondary buyout of ISG Technology Limited.
The deal sees a successful exit for RJD Private Equity which originally backed a management buyout of the business in 2005.
ISG designs, installs and manages mission critical networking infrastructure solutions for blue chip organisations across the UK, including retailers, UK government, quick service restaurants (QSR) and major global ICT and telecommunications companies. The company is a recognised expert in large scale Wi-Fi installations which are the backbone of their clients’ internal systems and are pivotal to generating operational efficiencies and profit improvement among its customer base.
The company has built a strong reputation for delivering seamlessly and rapidly to some of the largest multiple site businesses in the UK. Customers include some of the UK’s largest retail, grocery and QSR operations in the UK, many with over 1,000 sites.
ISG had turnover of £18.5m in the last financial year, is growing rapidly and employs 173 people across the UK and at its technical support centre in Sofia, Bulgaria.
The £9m investment from WestBridge Capital and Octopus Investments has been supported with £4.5m of senior facilities from Barclays Bank, which will allow ISG Technology to accelerate its growth.
WestBridge Capital partners Sandy Smart and Valerie Kendall led the transaction and will join the board of the company as non-executive directors.
Sandy Smart said:
“Although ISG already has a very strong market position with a robust business model, loyal customer base and healthy recurring revenues, our investment will support further development of its sales and marketing programme and also expansion into new vertical markets.
“The management team is ably led by Mike Morrison and is technically well proven and very client-focussed.”
Colleague Valerie Kendall added:
“ISG provides essential technologies which improve service and facilitate cost savings within their clients’ operations. We are confident that the company is well-placed to prosper despite the fallout from the recent EU referendum.
“We are delighted to have been able to deliver an exit for RJD and allow the management team at ISG to continue to invest in its business.”
Mike Morrison, chief executive officer at ISG, said:
“The WiFi connectivity market in the UK is forecast to show excellent growth over the next five years. As well as commercial organisations increasingly using technology to drive down costs within their internal operations, customer facing organisations are using more in-store technology to improve the customer experience and drive sales, all of which presents great growth opportunities for us.
“We are particularly pleased to have backing from WestBridge Capital. As well as their experience within the technology sector, they have a mature and understanding approach to investment. We look forward to working in partnership with them to achieve our ambitious growth plans.”
Due diligence in the transaction was provided by PwC (financial); Armstrong (commercial); Diligencia (management); Capital Law (legal); and Willis Towers Watson (insurance).
Other advisers included Grant Thornton; Deloitte; Lewis Silkin; Shakespeares; and Osborne Clarke.