Inflexion is backing the £44m (€61m) MBO of Eurotel, an independentUK provider of telecom services to Small to Medium sized Enterprises (SMEs).
The firm founded in 1995, employs 300 people and has more than 15,000 customers. In 2005, Eurotel was acquired by Young Associates for £19m. The firm specialises in acquiring and developing telecoms and IT companies in the UK.
Essentially, Eurotel acts as a conduit for services between wholesale operators and SMEs.
The total spend in the UK corporate telecoms market was around £16.8bn last year. In Eurotel’s target market, enterprises employing less than 50 people, there are 1.2m companies, employing 10.9m people and spending £2.6bn on telephony.
“We have been impressed by Eurotel’s market position and future scope for growth,” explained Simon Turner, managing partner of Inflexion Private Equity.
Funds under Inflexion management have invested £21.25m and have taken a majority equity share in the deal. The management team and Young Associates have invested as well. They have negotiated a package of £21.5m in debt facilities with Acquisition Finance and Lloyds TSB Corporate Markets.
“Were brought in to find buyers for the business and considered several options,” commented Chris Godsmark, a director with Oakley Corporate Finance. “In the end Inflexion turned out to be the best choice.”
He added that Inflexion would back Eurotel’s growth strategy and he expects the telecoms firm to carry on making complementary acquisitions.
Inflexion was advised by KPMG, Grant Thornton and Lloyds TSB. Young Associates were advised by Investec and Oakley Corporate Finance.