LDC invests £20m in Mitrefinch

MITREFINCH, a developer of human capital management software, has secured an equity investment of more than £20m from LDC in Manchester to support its international expansion.

The investment, part of a management buyout led by chief executive Debbie Guppy, will see LDC become a significant shareholder in the company, alongside additional members of the management team.

Mitrefinch, which is headquartered in York, provides software to help firms manage time and attendance, rostering, HR and payroll and it counts brands such as L’Oreal, Nestle, Amec Foster Wheeler, DFS, the Forestry Commission and the University of Leicester as clients.

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

Following LDC’s investment, the firm plans to expand its nascent overseas business in Canada, the US and Australia, as well as developing new and existing relationships in its more established UK business.

It also plans to commit significant investment to new product development to continue expanding and improving its suite of products.

Debbie Guppy, chief executive of Mitrefinch, said: “This is an important step for the business and an exciting time for our people and customers. From the outset, LDC saw the potential in the business and bought into our vision as a management team.”

Richard Ibbett, investment director at LDC, 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.”

Earlier this year LDC’s Manchester office announced plans to invest £100m locally during 2016 and the deal is iuts third this year, following investments in business services firm Ellis Whittam and Cloud-based IT and communications group Giacom.

Jonathan Bell, director and co-head of LDC in Manchester, said: “Backing Mitrefinch is another signal of our appetite to invest from the regions to support ambitious UK businesses and their management teams.

“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.”

Both Ibbett and Bell will join the board as non-executive directors.

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 (James Kerrigan and Chris Wilson) in Manchester and Harris Williams.

Graham Pearce, KPMG’s head of technology in the North, said: “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.”

Debt facilities were provided by Silicon Valley Bank.

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