£20m LDC injection for software business as part of MBO

THE management at York-based software business Mitrefinch has secured £20m in equity investment from LDC as part of a management buyout led by chief executive Debbie Guppy.

It will see the private equity arm of Lloyds Banking Group take a “significant” shareholding in the company and allow it to invest in further international expansion.

Mitrefinch provides HCM software covering time and attendance, rostering, HR and payroll functions, and is already working with 3,500 organisations.

Customers include everything from SME’s to brands such as L’Oreal, Nestle, Amec Foster Wheeler, DFS, the Forestry Commission and the University of Leicester.

Mitrefinch’s revenues have grown 50% over the last three years from £10m to £15m.

With LDC’s investment and following the MBO, the business is planning to expand overseas in Canada, the US and Australia, as well as develop products including its software as a service (SaaS) offering.

Debbie Guppy, CEO of Mitrefinch, said: “This is an important step for the business and an exciting time for our people and customers.

“[LDC’s] approach, track record and sector expertise gave us the confidence they were the right long-term investment partner to help us deliver our ambition for the business – to be the leading provider of integrated, SaaS-based human capital management software in the market with a growing and global customer base.”

Jane Gilbert Boot, an investor in LDC’s Leeds office, said: “Debbie and the team have built an enviable market position for Mitrefinch, with a high-performing suite of integrated products and a loyal, fast-growing customer base. With significant additional capital to invest in the business, a high quality team and a clear growth strategy, it has a real opportunity to achieve a dominant position in a growing, consolidating and globalising marketplace.”John Garner director and head of LDC in Yorkshire and the North East

LDC has been involved in further regional deals including the management buyout of light gauge systems manufacturer PAW Holdings Limited and a £16.5m investment in games developer Team17.

John Garner, director and head of LDC in Yorkshire and the North East, (pictured right) added: “There are dozens more firms across the region with that same potential to scale, and it’s important management teams know there are experienced partners like LDC who stand ready to support them.”

The business was advised by GCA Altium’s Manchester office in a process led by Adrian Reed, Dom Orsini and Jon Stead, with legal support from Squire Patton Boggs (Steven Glover).

LDC was advised on its investment by KPMG (Jonathan Boyers, Alex Hartley, Graham Pearce and Nick Dodd from KPMG’s Deal Advisory practice), DLA Piper (James Kerrigan and Chris Wilson) in Manchester and Harris Williams.

Graham Pearce, KPMG’s head of technology in the North, commented: “This transaction represents the latest in a string of deals which have seen PE spend in the tech sector in this region, supporting the ambitions of growing businesses in this exciting part of the economy. In this case, with LDC’s backing, I look forward to seeing Mitrefinch expand on an international scale.”

Debt facilities were provided by Emma Stephens and Darren Davidson of Silicon Valley Bank.

 

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