MDNX Group acquires Easynet

Independent carrier integrator MDNX Group has acquired Easynet, a provider of managed networking, hosting and cloud integration services, from LDC. The merged operations of the two businesses will operate under the Easynet brand going forward. The deal has been backed by Equistone Partners Europe.

PRESS RELEASE

MDNX Group, the UK’s largest independent carrier integrator delivering optimal managed networking and hosting solutions to the UK market, is pleased to announce its agreement to acquire the entire issued share capital of Easynet, a global provider of managed networking, hosting and cloud integration services, from LDC. The combination of Easynet and MDNX (together “the Group”) will create the largest independent network and hosting integrator in Europe. The merged operations of the two businesses will operate under the Easynet brand going forward.
The combination has been backed by Equistone Partners Europe Limited, one of Europe’s leading mid-market private equity managers, which will hold a majority stake in the newly formed Group. LDC has reinvested in the newly formed Group to acquire a minority stake alongside MDNX management. MDNX was previously backed by Kelso Place Asset Management.
Highlights
• Transformational acquisition that combines two highly complementary businesses
• Robust relationships with an impressive blue chip customer portfolio, underpinned by a reputation for strong service delivery
• MDNX’s advanced front and back office automation capability, along with an excellent reputation in the UK Public Sector market
• Complementary knowledge and experience
• An increased scale of operation, which will allow the combined businesses to offer a geographically expansive, flexible and competitive service portfolio to customers
• Strong capabilities in managed networking, managed hosting and cloud infrastructure services, unified communication services, application performance management and security services
• Highly skilled and committed staff
Mark Thompson, Chief Executive of MDNX, will also lead the new Group as Chief Executive, supported by Wayne Churchill as Chief Operating Officer and Mike Mulford as Chief Financial Officer. Former Easynet Chief Executive, Greg Clarke, will take up the role of non-Executive Chairman of the Group.
Mark Thompson, CEO of MDNX Group said:
“Having founded MDNX only 3 years ago, the Executive team is delighted to announce this transformational acquisition. Along with our previous acquisitions, it allows the Company to fulfil its ambition of becoming the largest independent European integrator of managed networking and hosting services.
“The two companies combined create a tremendously exciting opportunity to provide compelling and differentiated services to our customers on a global basis. I would like to thank our prior investors, Kelso Place Asset Management, for supporting our achievement of this significant milestone. We now look forward to working with our new investors Equistone and LDC.”
Rob Myers, Managing Director of Equistone Partners Europe, commented:
“We have been impressed with the growth that Mark Thompson and his high calibre team have delivered whilst building MDNX. We recognise the extensive experience of the team in the managed networks and cloud service space and view the combination of MDNX and Easynet as a highly attractive investment opportunity.
“The management team have a well-developed and clear strategy to create the leading European independent network and hosting integrator and Equistone is delighted to have been able to provide the funding that enables MDNX and Easynet to be merged. The combined business has market leading staff, expertise and systems and is well positioned for growth. We look forward to supporting the team during this next phase of development.”
Greg Clarke, non-Executive Chairman of the newly formed Group said:
“IT is driving huge transformation in businesses across the world, with data, cloud and applications management finding a place on the board’s agenda. Now more than ever, these organisations need a reliable, customer-focused organisation with innovation at the heart of its business, integrated with industry-leading infrastructure and back-office systems. Bringing together Easynet and MDNX has created a technology powerhouse of skills, knowledge and operational excellence.

“Combining forces with Easynet enables MDNX to benefit from the Easynet brand and to develop its business outside the UK, establishing a strong footprint in Europe. At the same time, Easynet benefits from the strength and great reputation of MDNX in the public sector market in particular, as well as its impressively structured back office automation, business systems and carrier integration business model.”

All countries within the Easynet Group will be part of this transaction, with the exception of the business in Germany. For a number of years, Easynet’s business in Germany has been successfully operating and developing its business specialising in the provision of unique high-end IT sourcing solutions to the Enterprise market. To enable this business activity to accelerate its growth further, the decision has been taken for it to become an independent, standalone business. Owned by its current shareholders, LDC and the management team, this independent business will now have a greater level of flexibility to further develop in the area of IT sourcing solutions. All customers stay with this company which will be renamed Nexinto GmbH in 2014.

In addition, the newly formed Group will create a new company in Germany into which all the dedicated network assets from the former German branch of Easynet will be transferred. It will then invest to build a new business in Germany which will be called Easynet Global Services GmbH and will partner with Nexinto in global network business.
Advisers on the transaction included:
- For Management: Proskauer Rose (Legal); Grant Thornton (Tax)
- For Equistone: Marlborough Partners (Debt Adviser); Travers Smith (Legal Adviser); Oakley Capital (Corporate Finance); CiL (Commercial Due Diligence); Intuitus (IT Due Diligence); Deloitte (Financial, Tax, Operational Due Diligence); KPMG (Financial, Tax Due Diligence)

ENDS

For more information:

Equistone/MDNX
College Hill +44 (0)207 457 2020
Antonia Coad +44 (0)207 457 2023
Zinka Bozovic +44 (0)7769 255 380

LDC
Morgan Rossiter +44 (0)203 195 3240
Richard Evans
Easynet
Anne Amlot +44 (0)207 032 5811/+44 (0)7899 950730

Notes to Editors
About MDNX
MDNX is the UK’s leading independent integrator providing critical managed networks to major UK enterprise, local government and channel partners. It provides and proactively monitors services for 600 channel partners and 3000 customers, managing some of the most complex customer networks in the UK by integrating all the major UK carriers into its core integration network. Operating six high security data centres, with a 24/7 service desk, MDNX is committed to customer excellence. With numerous compliance accreditations under its belt, MDNX has also been approved by the Government Procurement Service to provide managed networks and shared services under the PSN. MDNX is headquartered in Bracknell. For more information, please visit www.mdnx.com

About Easynet
Easynet Global Services is a managed cloud infrastructure provider, with customers, employees and offices on every continent. It combines global reach with local expertise, providing a personalised experience wherever its customers are in the world. Customers include EDF, Sage, Yakult, Transport for London, Bridgestone, Q Park and Campofrio Food Group. Easynet is part of the UK Government G-Cloud programme, a procurement framework which promotes the Government-wide adoption of cloud computing.
Easynet’s dedication to providing service excellence has been recognised in several major industry awards, including European Service Provider of the Year 2013 and HP Best Joint Engagement Award 2013.
The combined forces of Easynet and MDNX benefits the customers and employees of both organisations. MDNX can further develop its business outside the UK, establishing a strong footprint in Europe, whilst Easynet benefits from the strength and great reputation of MDNX in the public sector market in particular, as well as its impressively structured back office automation, business systems and carrier integration business model.
Follow us on Twitter: @easynet. Connect with us on LinkedIn: Easynet Global Services
For more information visit www.easynet.com

About Equistone Partners Europe
• Equistone Partners Europe Limited is an independent investment firm owned and managed by the former executives of Barclays Private Equity.
• In January 2013, Equistone successfully completed the final closing of Equistone Partners Europe Fund IV with total capital commitments of €1.5bn.
• The Company is one of Europe’s leading investors in mid-market buyouts with a successful track record spanning over 30 years, with more than 350 transactions completed in this period.
• Equistone has a strong focus on change of ownership deals and aims to invest between €25m and €125m of equity in businesses with enterprise values of between €50m and €300m.
• The Company has a team of 36 investment professionals operating across France, Germany, Switzerland and the UK, investing as a strategic partner alongside management teams.
• Equistone Partners Europe Limited is authorised and regulated by the Financial Conduct Authority.
• For further information, please visit www.equistonepe.com

About LDC
• LDC is part of Lloyds Banking Group and is authorised and regulated by the Financial Conduct Authority.
• LDC backs ambitious management teams from UK-based companies seeking between £2m and £100m of equity for management buy-outs, institutional buy-outs or development capital transactions.
• LDC has, since 1981, completed over 400 investments.
• LDC has a portfolio of over 80 businesses across the UK which collectively generates £4bn of revenues and £460m of profit, and employs over 30,000 people.
• LDC invests in a broad range of sectors and has particular experience in Construction & Property, Financial Services, Healthcare, Industrials, Retail & Consumer, TMT, Travel & Leisure and Support Services.
• LDC has invested £1.5bn into ambitious businesses in the past five years to support their growth. It plans to invest £2bn over the next five years.
• LDC invested over £280m of equity across 18 new businesses in 2012. It also continued to support the ‘buy and build’ strategies of our portfolio firms with £86m of additional equity funding for acquisitions during the same period, alongside £23m drawdown into fund investments.
• LDC is the leading private equity company in the UK mid-market. Recent transactions include investments with Joules, Express Engineering, The Training Room, Equiom, uSwitch.com, Angus Fire, Rimor, Node4 and D&D London.
• LDC has a UK regional network alongside an international operation based in Hong Kong.

About Kelso Place Asset Management
• Kelso Place Asset Management LLP is a private equity firm that was founded in 2000.
• It focuses on special situations investing where there is potential for business improvement and long term growth, both organically and by acquisition.
• Kelso Place has raised four funds to date and has made 13 platform investments plus 13 bolt-on acquisitions.
• Kelso Place Asset Management LLP is authorised and regulated by the Financial Conduct Authority.

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