Multimillion-pound backing for MBO at construction software company
Private equity firm WestBridge has backed the senior management team at Manchester-based construction software company Eque2 to acquire the business from its existing shareholders.
The transaction provides an exit for LDC, which backed a £16m secondary buyout with a minority investment in November 2017, and the current institutional shareholders.
Funds managed by WestBridge have invested around £29m for a 75% stake in the business.
The buyout was led by Justin Moule (CEO) and Peter Davidson (COO), supported by Andy Bones (finance director), Richard Boston (marketing director) and Dominic Imrie (development director), who have led the business for many years.
Eque2 supplies business management software to more than 2,700 customers in the construction, housebuilding and contracting industries.
Revenues have grown significantly over the past four years and it has proven to be exceptionally resilient during the COVID pandemic.
The company continues to invest significantly in customer service and product development to allow customers to further integrate and mobilise the commercial and financial aspects of their business to drive efficiencies and, ultimately, improve profitability.
During its partnership with LDC, Eque2 made three acquisitions: Miracle Dynamics; JNC Solutions; and CliP IT Solutions.
It also developed the first cloud-based job costing system in the construction industry. Between 2017 and 2020, the business increased revenues by 29%, EBITDA by 85% and headcount by 53%.
Peter Barkley, investment director at WestBridge, which has a Manchester office, said: “Eque2 is a very attractive business.
“The management team is experienced with a proven track record and the company operates in a resilient market that is expected to grow strongly over the next few years as the UK emerges from the economic impact of COVID and Brexit.
“Added to which, Justin and the team have created a business with an excellent set of products, an unwavering commitment to addressing the needs of its customers, a strong sales and marketing team, established recurring income, high customer satisfaction and a clear roadmap to achieve future growth.
“We are delighted to have been chosen to partner with this top quality, dynamic team as it continues to develop its leading construction sector software.”
The WestBridge transaction team comprised Peter Barkley, James MacLeay, Rebecca Sinclair, Guy Davies, Valerie Kendall and Katherine Bond.
Justin Moule, who led the MBO, said: “Our three-year partnership with LDC has enabled us to build scale through acquisition and create a strong foundation for future growth.
“We were impressed with the WestBridge team and the dynamic, yet pragmatic, approach they took to this transaction.
“I’m confident that our respective strengths herald an exciting future and that with their support we will be able to further develop our market-leading position. We look forward to working with them over the next phase of our journey.”
WestBridge managing partner Guy Davies, said: “This is our sixth investment from WestBridge II. We are delighted that we have the opportunity to partner with Eque2 as they continue to develop the business and would like to thank Justin and the team for selecting us.”
John Clarke, investment director at LDC, said: “The team at Eque2 has driven real growth in their business through acquisition and investment in new product development. We’re proud to have supported them and wish them all the very best for the future.”
Advisors to WestBridge: Lincoln International – Chris Brooks, Anant Kapoor, Miles Kershaw, Xenia Sarri; Capital Law – Tom Kelleher, Gareth Williams-Davies, Catherine Golledge; Armstrong Transaction Services – Peter Cookson, Mike Callow; BDO – Chris Heatlie, Sarah Cumming, Matt Savage, Hilary Sharpe; GK Strategy – Martin Summers; Sales Blue Print – Graeme Hall.
Advisors to Management: Liberty – Dan Martinez, Simon Hill; Gateley – Kate Richards.
Advisors to LDC/Eque2 vendors: GCA Altium – Gabrielle Worrall, Adrian Reed, Chris Gough, Raiko Stelten, Dominic Orsini, Durgesh Panchani and Tom Shackleton; Gateley – Rebecca Grisewood; PwC – Chris Temple, Bobby Maclay, Jonathan Cooper, Peter Stephenson.
