Global marketing agency secures £77m loan and further PE-backing
ECI Partners has acquired a majority stake in digital marketing agency Croud after the agency secured a £77.6m loan.
The club loan from OakNorth, HSBC, Investec and Barclays will fund the deal, enabling Croud to make further acquisitions and grow. It marks an exit for LDC after the private equity firm backed the firm with a £30m investment in 2019.
Launched in 2011 by ex-Googler, Luke Smith, and the former head of search at Harvest Digital, Ben Knight, Croud has grown to employ more than 600 staff across its offices in London, Shrewsbury, New York, Atlanta, and Dubai. It’s worked with household brands including International Workplace Group (IWG), Selfridges, Amazon’s Audible and Prime Video, and Nespresso.
Croud’s US business has grown rapidly since LDC’s backing and now accounts for almost a third of the company’s revenue, and overall revenue has increased by more than 360% and headcount by more than 250%.
Croud created its ‘Croud Network’ – a global network of more than 2,900 on-demand digital marketing specialists called “Croudies”.
The management team also completed five complementary acquisitions – VERB Brands (now Croud Luxe), impakt Advisors, Born Social, Metageni and Vert Digital – and invested heavily in talent and technology to support growth at home and overseas.
Founded almost five decades ago, ECI Partners has grown into a leading growth-focused private equity firm, investing alongside ambitious management teams in deals valued up to £300m.
Luke Smith, co-founder and CEO of Croud said: “We thank David Andrews and the LDC team for being a supportive and impactful partner over the past five years. We’ve achieved significant scale and success with their support, whilst continuing to create brilliant opportunities for our people and deliver outstanding work for our clients.
“We’re delighted to be partnering with ECI for the next phase of Croud’s journey, maintaining our independence, while capitalising on new opportunities and innovation. We were thrilled to return to the teams at OakNorth and HSBC, as well as have new support from Investec and Barclays on this transaction – the fact that so many financial big-hitters were willing to back us is a testament to the strengthof our business and team.”
Rory Nath, investment director at ECI said: “We were impressed by Croud’s digital-first strategy, investment in tech and AI, and commitment to talent, as demonstrated by its recognition in Campaign and Sunday Times’ Best Place To Work lists. The business has outperformed the market through its Croudie model, ensuring speed, scale, and efficient delivery for clients.
“We look forward to continuing to invest in the technology and people alongside Luke Smith and Ben Knight whose energy, focus and determination will help inspire the team to deliver our ambitious vision together. This was a highly complex transaction, and we were impressed with the syndicate of banks who worked together to get the deal over the line in a short timeframe.”
Stuart Blair, director of debt finance at OakNorth added: “Croud is an excellent business that is defying the odds in a sector where many of its peers are struggling to maintain margins and retain clients, so it’s no surprise that it has secured the backing of such an exemplary investor in ECI. This funding package will be a key catalyst in enabling Croud to continue scaling and strengthening its reputation as a global leader in tech-enabled marketing for the foreseeable future.”
LDC and Croud were advised by GP Bullhound (corporate finance), Strategy& (commercial due diligence), A&M (financial due diligence) and DLA Piper (legal).
