Entrepreneurs build IT platform with growth capital injection and second acquisition

Two North West entrepreneurs have acquired Novem, a South Manchester managed services provider, for an undisclosed sum, aimed at expanding their IT managed services platform.

Alex Heslip and Chris Earle both exited from Manchester-based SME essential services provider Verastar in 2021, setting out on a buy-and-build plan to create their own operation.

Their acquisition was supported by private credit provider, TDC, which completed a refinance, providing a senior credit facility alongside an equity co-investment through its Impact Fund, which is dedicated to providing funding to Northern SMEs who are investing to grow and thereby enhance regional job creation opportunities 

To fuel their strategy, the pair have partnered with Independence Capital, a Greater Manchester-based disruptor in the private equity market. 

They made their first acquisition in 2023 with RISC IT, a North Wales-based cloud services provider. 

Marking their second acquisition, Cheadle-based Novem typically supports customers with 20 to 250 staff, and has significant expertise in fully and partially-outsourced IT support services.

The pair, which have yet to formalise a business name, were recently awarded an improved position for the second year running in the Channel Futures 501, the world’s ranking of Managed Service providers.

With a strategy firmly set on further complementary acquisitions in the managed service sector across the UK, the investment from TDC will be instrumental in supporting the team as they gear up to continue their buy-and-build approach to growth.

Alex Heslip said: “The acquisition of Novem is an exciting next step for our group as we continue to grow the platform. It is a highly prized asset, with key additional service capabilities to augment our own and strong organic growth potential, while also reaffirming our commitment to the North West.

“Perhaps though, most exciting is that we’re pleased to welcome Rhys Watson and Mike Ryan to our leadership team, and becoming investors, too.

“We recognise the value they can bring to the growing group and we’re excited to be calling on them as business partners as we plan for sustained organic growth and expansion of our overall proposition. This will allow us to become a group that genuinely leads as experts in the needs of SME customers.” 

Rhys Watson, managing director of Novem, said: “This is an exciting new chapter for Novem and we are so proud to be able to share this with the market as we are with our own staff and customers.

“We have been fortunate enough to have scaled significantly over the last three years, but we found ourselves at a crossroads.

“The next stage of growth for the business was going to entail a significant step-change, and in Alex and Max (of Independence Capital) we saw growth partners with a pedigree and plan who could enable that. For that reason, myself and Mike are thrilled to be remaining with the business, with enlarged roles and shareholdings in the group.”

Jon Petty, investment director at TDC, said: “IT services is a sector we know well and we are very pleased to be backing Alex and the team to help them achieve their vision.

“Our Impact Fund is dedicated to backing Northern businesses, and this is a great example of how we can help support ambition in the region.

“Novem is a great addition to the business and we look forward to supporting with further follow-on capital in the future.” 

The advisors to buy-side were Hill Dickinson (Jon Gillow – Legal, Alasdair McKinnon – Finance), Cortus Advisory (Nicola Merritt – Diligence). For sell-side, Myerson (Scott Sands – Legal) and Insight Business (Alison Marsh – Financials). For funder, Addleshaw Goddard (Ben Edwards – Legal).