Private equity firm sells interest in HR specialist

ECI Partners, the growth-focused mid-market private equity firm with offices in Manchester and London, has sold its investment in Citation to Hg Capital, for about £10.5m.

Wilmslow-based Citation provides HR and employment law, health and safety and ISO Certification solutions to 16,000 SMEs.

In 2012, the shareholders of Citation had decided that they wanted to exit in full having grown the business successfully under their stewardship.

In what is still a rarity in private equity, ECI backed a full management buy-in team led by Chris Morris – former chief executive of Manchester based ex-ECI investment Laterooms.com – enabling the shareholders to sell their entire equity in the business. 

ECI says since its invetment, CTI has been transformed through investment in people, technology and niche acquisitions.
 
The customer base has grown from 5,000 to 16,000; its headcount has grown from 200 to more than 400; revenue has grown from £20m to more than £40m forecast in 2016 and profits have grown at 32%.

Several million pounds were invested in Atlas, the new online customer interface which is the only platform in the market that allows customers to manage their employment law and health and safety tasks on a single portal.

In 2015, Citation was named as one of the UK’s Top 100 Best Companies to Work For by The Sunday Times.

ECI says it supported Chris Morris and his team at Citation to make two acquisitions – Bibby Consulting & Support, from Liverpool-based Bibby Group and QMS.

The company claims a track record of investing in growth companies based in the North West including current investment in Knowsley-based Clarke Energy and notable previous investments in NCC Group, Bargain Booze (now listed as Conviviality Plc), Laterooms.com, Think Money Group and Ascribe.

Morris  said: “It has been an enjoyable and rewarding few years working with ECI again to help transform Citation into the market leading business it is today. 

“We are proud of what we have achieved and excited about working with Hg to continue to develop Citation. ”

Richard Chapman, head of business services at ECI and director at Citation, said: “It has been a pleasure supporting Chris and his team at Citation over the past three years, working with them to transform the company.

“Since our investment, the team have achieved a huge amount and created a business that understands its customers’ needs and delivers a high quality service they value. 

“This successful investment adds to our strong track record in backing high growth businesses in the tech-enabled business services sector. We wish the team every success with Hg as they continue to develop their role as a leading champion for UK SMEs.”

Deloitte provided vendor due diligence on the transaction.

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