Data Connection Ltd., a London-based telecom networking company, has raised a “significant investment round” led by Francisco Partners. Sequoia Capital also participated.
Data Connection Limited (DCL) today announced that leading private equity firm Francisco Partners has led a significant investment round into the company, including its MetaSwitch division. One of the world’s largest technology-focused private equity funds with approximately $5 billion in capital under management, Francisco Partners has teamed up with its strategic partner, Sequoia Capital, one of Silicon Valley’s most prominent venture capital firms, to provide the financial resources and expertise to help take Data Connection and MetaSwitch to the next level of growth.
“Having recently passed $100 million in annual revenue, it became clear to us that our current growth trajectory would be significantly enhanced by tapping into the experience and resources that major players such as Francisco Partners and Sequoia Capital can bring,” said Ian Ferguson, Chairman and Founder of Data Connection and MetaSwitch.
The entire existing management team, led by Ian Ferguson, stays in place. In particular, Phil McConnell continues to lead Data Connection’s network protocols business, while Graeme MacArthur and John Lazar continue to lead the MetaSwitch division.
“What attracted us to Data Connection and MetaSwitch was their exceptional track record of profitability, combined with the exciting market opportunities for their world-class technology,” said Ben Ball, a co-founder of Francisco Partners based in San Francisco.
Deep Shah, a Principal at Francisco Partners based in London, added, “During our due diligence process, we came to realize that the company’s real source of strength was its people and culture — not just the senior management team, but an incredible depth of talent and commitment throughout the organization. Our goal is to help build on that proven successful formula and help the company continue, as a cohesive unit, to deliver superior solutions to its growing customer base.”
The Data Connection Employee Benefit Trust (EBT) — previously the sole shareholder in the business — retains a major stake in the company. This ownership structure ensures that all current and future employees will continue to share in the success of the company, and retains the core culture of rewarding people equitably, according to their contribution.
Speaking to the benefits of the new structure, Mr. Ferguson commented, “This transaction is good for our employees, who benefit via the EBT, and for our customers, who will benefit from us becoming an even stronger company through the injection of expertise and resources from Francisco Partners and Sequoia Capital.”
Morgan Stanley acted as financial advisers and Slaughter & May as legal advisers to Francisco Partners and Sequoia Capital. Wachovia Securities acted as financial advisers and Linklaters as legal advisers to Data Connection.
About Data Connection
Data Connection Limited (DCL) is the leading independent developer and supplier of IMS, SBC, SIP, Megaco/H.248, Diameter, MGCP, Unicast and Multicast IP Routing, Packet and Optical MPLS, ATM, and SNA portable products, as well as complete telecom solutions via its MetaSwitch division. Data Connection customers include the world’s largest software and hardware vendors, including Alcatel-Lucent, Cisco, IBM, and Microsoft. With over 400 employees, Data Connection is headquartered in London, UK with US offices in Alameda, CA, Boxborough, MA, Dallas, TX and Reston, VA. For more information, please see www.dataconnection.com.
MetaSwitch, a division of Data Connection, is an industry-leading vendor of switching and applications solutions for both packet and circuit-switched networks. Its MetaSphere service delivery platform and applications suite enables a broad set of hosted IP communications services, while its core session control and media/signaling gateway products support a full range of Class 4/5 softswitch capabilities. Customers include many of the world’s leading operators of wireline, wireless and cable networks, with deployments that scale to millions of subscribers. For more information, please visit www.metaswitch.com.
About Francisco Partners
With nearly $5.0 billion of committed capital and offices in San Francisco and London, Francisco Partners is one of the world’s largest technology-focused private equity funds. The firm was founded to pursue structured investments in technology companies undergoing strategic, technological, and operational inflection points. Francisco Partners targets majority and minority investments in private companies, public companies, and divisions of public companies, with transaction values ranging from $30 million to $2.0 billion. The principals of Francisco Partners have a proven track record, having invested in excess of $3.0 billion of equity capital in over 50 technology companies. For additional information, visit www.franciscopartners.com.
About Sequoia Capital
Since 1972, Sequoia Capital has provided early stage and growth stage venture capital for very smart founders and executives who have turned great ideas into sustainable companies of enduring value. As the “Entrepreneurs Behind the Entrepreneurs,” Sequoia Capital’s Partners have worked with accomplished innovators and operators who built great franchises such as Apple Computer, Cisco Systems, Flextronics, Google, Informix, Linear Technology, LSI Logic, Microchip, NetScaler, NetScreen, Network Appliance, nVidia, Oracle, PayPal, Redback Networks, Yahoo! and YouTube. To learn more about Sequoia Capital visit www.sequoiacap.com.