Leading mid-market private equity firm LDC has exited its investment in IT solutions provider Node4 Holdings in a sale to Bowmark Capital.The company has grown impressively since LDC backed the management buyout in May 2013, increasing revenues from £13million to £28million (March 2016) and more than tripling staff numbers, with the business now employing 184 people.During LDC’s tenure Node4 activated a strategic buy and build strategy that saw it complete the acquisitions of LETN Solutions, Reconnix and Premier IT Networks, as it capitalised on the growing trend for customers to outsource IT services and favour integrated providers like Node4.Private equity firm Bowmark has acquired a majority shareholding in the business alongside the current management team, led by founder and Chief Executive Andrew Gilbert. As part of the secondary buyout, Node4 has raised £40million to fund its continued acquisition strategy and strengthen its capabilities in an increasingly digitised market.The sale price, which is undisclosed, represents a money multiple of 2.8x for LDC.
Martin Draper, Chief Executive at LDC, said: “Being able to provide the advanced technology solutions that businesses now need to remain competitive has been key to the growth of Node4. The company’s success demonstrates the impact private equity investment can have as a catalyst to build scale and value, and to support the vision of ambitious management teams.
“Our close partnership with Andrew and the team has helped the business to more than double its revenues and triple its employee numbers. The expanded business and quality of the management team ensures Node4 has a strong platform to achieve further growth, and we wish the business all the best for the future.”
Andrew Gilbert, Chief Executive at Node4, said: “Our well-invested infrastructure and technical base provide us with a highly scalable platform, and the financial backing and strategic guidance we have received from LDC over the past three and a half years has been fundamental to our success and growth. With Bowmark’s support, and the additional firepower that this transaction gives us, we are well-placed to capitalise on the significant growth opportunity, both organically and by acquisition.”
Bowmark Investment Director Stephen Delaney said: “We have been tracking the ICT managed services sector for a number of years and are delighted to have the opportunity to invest in the standout company in the sector. We have been hugely impressed with Andrew Gilbert and his team and what they have achieved to date.”
PwC’s corporate finance team acted as lead advisers to Node4 on the sale
Node4, established in 2004, is a leading provider of integrated IT solutions, hybrid infrastructure and cloud-enabled managed services to small and medium-sized businesses.