UK-based Business Growth Fund has backed its first Midlands deal. GCI Telecom Group is an independent telecoms and data services provider, led by Midlands based IT and communications entrepreneur, Wayne Martin. BGF has invested 10 million pounds ($15.8 million) of equity capital to support GCI Com’s organic growth and acquisition strategy, in return for a minority stake in the company. BGF was established to help Britain’s fast-growing smaller and medium sized businesses.
Business Growth Fund (BGF), established to help Britain’s fast-growing smaller and medium sized businesses, today announced its first Midlands investment in GCI Telecom Group (GCI Com), an independent telecoms and data services provider, led by Midlands based IT and communications entrepreneur, Wayne Martin.
BGF has invested £10 million of equity capital to support GCI Com’s organic growth and active acquisition strategy, in return for a minority stake in the company.
Headquartered in Lincoln, GCI Com has a turnover of approaching £65 million and employs 220 staff across 9 UK locations. The group was formed in 2000 and has since grown rapidly, through a mix of organic growth and 19 strategic acquisitions. Today, it is one of the fastest growing managed communication providers in the UK with a 68% CAGR over the last two years.
GCI Com was founded by Group CEO, Wayne Martin, who has been involved in the communications industry for 25 years, having started his career at Cable & Wireless in the 1980s.
It has also been announced that John Cronin will join GCI Com as Non-Executive Chairman. John brings a wealth of executive and non-executive experience in growing and developing businesses in the technology and communications sectors, including senior roles at Arqiva Broadcast, Azure Solutions, NetSource Europe, Teleglobe, Kast Telecom, Mercury Communications and BT, and was introduced to the business by local executive search and recruitment firm Mallory Partners.
GCI Com services the rapidly expanding and converging data services and communications markets. It provides inbound and outbound telephony and data services to medium sized corporates and smaller enterprise customers on a national basis. Its high quality, blue chip customer base includes a diverse mix of companies from a wide range of sectors, including construction, industrials, media, retail and distribution.
The telecoms and IT services markets, in which GCI Com operates, are forecast to grow at between 5% and 50% as a result of the increased drive to outsourcing of infrastructure, services and software, particularly in the mid size corporate sector.
IT and communications systems are a critical part of any business infrastructure, but their increasing complexity and diversity and the resulting cost of having the requisite management skills in house has made the decision to outsource to specialist providers easier and more attractive. The macroeconomic environment is contributing to this trend, with businesses looking to reduce capital expenditure and operating costs while maximising revenues through improved efficiency.
Wayne Martin, Founder and CEO of the GCI Com, commented:
“BGF’s investment is a major milestone for GCI Com. It gives us the opportunity to significantly build scale and service diversity at a time when our clients need it and the market conditions are ripe for growth.
For us, BGF’s offer made good business sense. We have worked very hard over the last twelve years to build up a range of specialist services and wide network footprint to best service our customer base. BGF’s injection of capital and objective operational experience will help us to consolidate the progress we have made to date and continue our active acquisition programme.
In the past we have relied on bank debt or company cash reserves to finance our growth. The thought of private equity backing had not particularly appealed. BGF made us think differently. I haven’t ceded control of my business, but am in a stronger position because of their involvement as a partner and long term equity investor to realise the ambitions that I have for it.”
Tim Whittard, the Investment Director who led the investment from the BGF’s Birmingham office, commented:
“GCI Com is a perfect fit for BGF. We are keen to back highly motivated, focused entrepreneurs, qualities that Wayne Martin has clearly demonstrated in building this strong and credible business. GCI Com has scale, critical mass and significant potential to grow both organically and through further acquisition, which is in line with both the developments in the market and customers’ own requirements. Furthermore, the sector in which it operates is enjoying rapid growth due to the convergence of IT and telecoms, the move to cloud computing and corporate desire to outsource.
In addition to providing growth capital, BGF offers guidance and access to a wide network of contacts and we look forward to supporting Wayne and his team as they take the business to the next stage of its development.”
Richard Bishop, BGF Head of Investments, commented:
“GCI Com is the first investment that BGF has made in the Midlands. We believe that there are many high quality businesses across the Midlands, like GCI Com, which have real potential but which have not obtained the funding that they need, and we therefore expect this to be the first of many BGF investments in the region. With capital at our disposal, we have the means to significantly expand the market for investment in small and medium sized businesses.
This was an off market deal sourced by our Birmingham based team – Wayne and his team were not originally looking for equity investment. However, we are able to contribute more than financing alone and this made our offer compelling.”
BGF was advised on the deal by Wragge & Co and BDO and GCI Com was advised by Eversheds, Latitude Partners and Intuitus.
Emily Weston, Equity Dynamics – 07825 326 442
Corinna Osborne, Equity Dynamics – 07825 326 440
Notes to editors:
About Business Growth Fund:
Business Growth Fund has been established to help Britain’s fast growing smaller and medium sized businesses. Growth potential is the key criteria. BGF will invest between £2m and £10m per business in return for a minimum 10 per cent equity stake and a seat on the board for a BGF director. BGF will provide long-term equity investment for those growing companies that today do not have access to this source of capital. As such BGF hopes to be a catalyst for growth among smaller UK companies.
BGF is an independent company with capital of up to £2.5 billion, backed by five of the UK’s main banking groups – Barclays, HSBC, Lloyds, RBS, and Standard Chartered. BGF is managed completely autonomously with an independent management team.
BGF is one of a range of initiatives designed to forge a new relationship between the banking sector and UK businesses, and BGF works in close collaboration with the British Bankers’ Association as well as other key business organisations across the UK.
About GCI Com
GCI Com provides inbound and outbound telephony and data services to medium sized corporates and smaller enterprise customers on a national basis.
Its services enable customers to outsource the provision of their communications connectivity and infrastructure, systems maintenance and usage billing to one single supplier and helps them to better manage inbound calls. Their software-enabled services, which maximise the value of telephone interactions, include monitoring, analysing and recording of calls as well as the provision of interactive voice response capabilities.
With its own fibre-optic communications network and state of the art data centres, the company also offers its customers a fully outsourced, cloud based solution for handling their IT and communications.