LDC backs MBO of micro SME IT firm

PRIVATE equity firm LDC has backed the management buyout of Hull-based IT firm Giacom World Networks.

The undisclosed deal, led by LDC’s Manchester office, will enable Giacom to accelerate its growth through increased investment in its proprietary platform, the integration of additional cloud products and to expand its service provider network.   

Founded by Nick Marshall in 1999, Giacom targets the micro SME market and has experienced rapid growth over the last three years as micro SMEs have moved their  IT  to the cloud.

The cloud IT and communications provider turned over £3.81m in the year to 31 July 2015, and returned pre-tax profits of £1.18m, up from £773,058 the year before.

It has a network of more than 3,500 IT consultants, service providers and resellers via its proprietary MessageStream platform.

Giacom is one of only eight Microsoft 2-Tier/indirect Cloud Solution Provider (“CSP”) partners in the UK and is able to offer Microsoft SaaS and IaaS products such as Office 365 and Azure to service providers.

As part of the transaction, the management team – which will continue to be led by chief executive Nick Marshall – will remain majority shareholders, with LDC acquiring a significant minority stake.

The transaction was led from LDC’s Manchester office by investment director Simon Braham who will join the company’s board and director Jonathan Bell.

NIck Marshall, chief executive of Giacom, said: “Despite operating in a highly-competitive and fast-paced industry, we’ve always had our eye on the underserved IT consultants and micro SME end-users and it’s this constant focus that has helped Giacom evolve rapidly from its roots.

“By ensuring IT consultants can offer the complete package via one intuitive platform we’re helping many organisations streamline their operations and save costs in the process. We now operate one of Europe’s fastest growing cloud marketplaces, but there is so much scope for further growth.

“Bringing LDC on board will help us deliver our next phase of growth.”

Simon Braham, investment Director at LDC, said: “Giacom has a highly capable leadership team, a unique proposition to the market and a proven ability to innovate at pace. As a result, the business has posted impressive revenue and profit growth of more than 50% per annum in recent years, despite operating in a highly competitive market.”

LDC was advised by KPMG Corporate Finance (Alex Hartley, Nisha Sharma and Graham Pearce), Gateley plc (Paul Jefferson and Stephen Roberts), DSW Transaction Services (Ed Brentnall and Catriona Lang), EY (Olivier Wolf) and KPMG Tax (Steve Heath), while Giacom was advised by KBS Corporate (Tony Ford, Stuart Lees and David Gardner) and TLT LLP (Ian Roberts and Stephen Devlin).

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