£38m secondary buyout provides significant return for KCP
PRIVATE equity firm Key Capital Partners (KCP) has achieved a “significant return” less than two years after investing £3m in a Warrington business.
WHP Group, which provides support services to the mobile telecoms sector, has completed a £38m secondary buyout to Palatine Private Equity which results in the exit of Leeds-based KCP.
When KCP’s investment was made, in June 2013, WHP employed about 100 people and had annual revenues of £17m. It now employs 275 people and has sales of £30m, operating nationally from Leeds, Glasgow and Reading.
Peter Armitage, partner at KCP, said: “In just a short space of time, the company has nearly doubled both turnover and profitability and now boasts some of the most high profile clients in the sector. In Palatine, we have found an ideal partner to continue the company’s ambitious growth strategy and we’re certain the firm is in good hands.”
The buyout will see Palatine Private Equity invest in the business with a £16m investment for a majority share, helping to accelerate its nationwide growth strategy. Palatine partner Andy Lees and investment manager James Winterbottom will join WHP’s board as non-executive directors.
“The UK telecoms market has been very strong over the last few years,” said Rob Potter, managing director at WHP Group. “Our capacity to offer efficient services and our continued investment in a highly skilled team has enabled us to capitalise on this opportunity and increase our share of the market.”
Palatine was advised by Tim Clarke of Park Place Corporate Finance with Pinsent Mason providing legal advice and Analysys Mason providing commercial due diligence.
Chris Froggat of Convex Capital and Chris Moss of JMW advised WHP and KCP.
Other advisers on the transaction included BDO (financial due diligence and tax), The Berkeley Partnership (operational review), The Quinn Partnership (human capital review), Marsh (insurance due diligence) and Baker Tilly (tax due diligence).
