Zeus dials up first successful exit
MANCHESTER-based private equity fund Zeus has achieved its first successful exit since raising its initial £100m fund in 2007 by selling London-based XLN Telecom in a deal that is believed to value the company at around £80m.
The business, which was founded in 2002 in Vauxhall by Christian Nelleman, has been bought by another private eqiuty firm, ECI Partners.
Zeus gained a majority stake in the business for £6.63m in January 2008 and subsequently backed a £2m buyout of competitor firm OneBill Telecom in March 2009. XLN now employs 180 staff at its head office and recorded a turnover of £54m in the year to March 2010 – up from £27m in 2007.
Zeus has made a return of 4.5x on its investment in the business.
Managing partner Gary Tipper said: “XLN has been able to take advantage of a highly fragmented sector and position itself as a market leader in the SME telecoms space.
“Under the leadership of CEO Christian Nellemann, XLN has experienced exceptional growth over the past two years and I wish the business all the best for the future in its partnership with ECI.”
XLN said that the deal would release new funds which will allow it to double in size as it completes more acquisitions.
“We now have a highly profitable and scalable business that will allow us to rapidly expand the range of services we deliver to the small business market,” said Nellemann.
“We are delighted that ECI will be a key part of the business’s exciting next chapter given the opportunities for consolidation within our sector.”
Zeus was advised on the deal by Deloitte and Shoosmiths. Clearwater Corporate Finance advised XLN.
