MBO at cloud communications firm

A MANAGEMENT buyout has been completed at a Hull cloud communications business.

Mid-market private equity investors LDC have backed the MBO at Giacom World Networks for an undisclosed sum.

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.

Founder Nick Marshall, who launched the business in 1999, will remain involved in the management of the business, leading it as chief executive.

The management team as well as Mr Marshall will remain majority shareholders, with LDC acquiring a “significant” minority stake.

Micro SMEs are continuing the trend of moving software and IT solutions from on-premise to the cloud, and the business serves around 3,500 IT consultants, service providers and resellers via its specially designed proprietary MessageStream platform.

Backers say the transaction will enable the business to accelerate its growth, allowing it to develop more cloud-based products.

The business currently supports 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. It is able to offer Microsoft SaaS and IaaS products such as Office 365 and Azure to service providers.

The transaction was led from LDC’s Manchester office by LDC investment director Simon Braham and director Jonathan Bell, and Mr Braham joins the board.

Nick Marshall, Giacom chief executive, 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. As well as giving the business access to the capital we need to scale, LDC is a partner who understands not only our sector, but also our vision and ambition for the future. This is an exciting time for our customers, our network of consultants and our people.”

Simon Braham, Investment Director at LDC, added: “More than 99 per cent of UK businesses are small and medium sized, with an increasing number accessing software solutions via the cloud. With further investment,

“Giacom has a strong opportunity to consolidate its position in the market, enhancing the service it provides to its network of IT consultants and subsequently becoming the go-to software provider for businesses at this end of the market.”

LDC was advised by Alex Hartley, Nisha Sharma and Graham Pearce of KPMG Corporate Finance, Steve Heath of KPMG Tax, Paul Jefferson and Stephen Roberts of Gateley plc, Ed Brentnall and Catriona Lang of DSW Transaction Services, and Olivier Wolf at EY.

Giacom was advised by KBS Corporate’s Tony Ford, Stuart Lees and David Gardner, with Ian Roberts and Stephen Devlin of TLT LLP.

 Graham Pearce, corporate finance director and head of tech for KPMG across the North, said: “We are delighted to have advised LDC on its investment into Giacom, a Yorkshire business successfully disrupting the traditional delivery of software using cutting edge cloud technology.

“The investment by LDC will help the business continue on its journey as Microsoft’s leading Cloud Solutions Partner in the UK, and is another example of how technology businesses across Yorkshire are attracting strategic investment to help further establish the North as a leading player in the tech world.”

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