News
LDC backs Onecom in £100m deal
22 Jul 2019
Onecom, the UK’s largest independent business telecommunications provider, has secured a £100 million funding package from mid-market private equity firm LDC and credit funds managed by an affiliate of Ares Management Corporation (NYSE: ARES) to help support organic and acquisitive growth.
Onecom currently manages nearly 100,000 business customers, delivering communication services and unified solutions across fixed line voice, connectivity and cloud computing to some of the UK’s most dynamic companies. These include Farrow & Ball, Thwaites, Celtic Manor and 118 UK Ltd.
Headquartered in Fareham, Hampshire, the business has doubled its revenues over the last five years. It employs 400 people across 10 regional offices and its partners include Samsung, Apple, Gamma, Mitel and Virtual1. It is also a major partner of Vodafone, and last month they announced a five-year deal together that will be worth up to £600 million in revenue.
Onecom is led by CEO Ben Dowd, former group sales and business director at O2. The investment from LDC will be used to help meet the significant growth plans that Dowd and his management team have been working on. Over the next three to five years, they expect to increase the workforce substantially, invest in systems and processes that ready the business for scale, and make acquisitions. Onecom is in a position to take full advantage of the opportunities presented through continued convergence in the communications sector and the expansion of digital infrastructure, including the rollout of 5G and superfast fibre.
To further assist with the company’s ambitious growth plans, Onecom is announcing Mark Thompson as its Chairman. Thompson formerly ran MDNX which, trading as Easynet, sold to Interoute for £402M in 2015. Since then, Thompson has successfully supported several boards, including G3 Comms.
I am delighted that LDC have backed the Onecom management team to pursue our growth strategy over the next few years. We have worked very closely with LDC over the last few months and they share the same level of ambition as we do."
“This investment will help accelerate Onecom’s growth organically and inorganically. I am delighted that Darren will stay in the business as Non-Executive Director. His experience of Onecom and the market will be invaluable to me. The opportunities that exist for Onecom are significant both from a partnership and an acquisitive perspective. Onecom has a proven track record of delivering growth and this approach will now be super charged. The market is ripe for consolidation and Onecom can play a big role in this across mobile and fixed solutions where there is a huge number of resellers. I am very excited to work with LDC, Darren, Mark and of course my management team to deliver this growth over the next 3-5 years.”
Darren Ridge, who founded Onecom in 2002, stated, “It’s great to get LDC’s backing and support for our vision. Under Ben and the management team’s leadership, we will see the business grow substantially over the next five years.”
Onecom has won several awards this year including ‘Best Customer Service Award’ at the Mobile News Awards in March; Best Unified Comms Dealer 2019 at the Mobile Industry Awards, and it has been named Vodafone Total Communications Partner of the Year for the 5th consecutive year.
The investment was led by LDC Head of London Yann Souillard, who will take a place on the board as Non-Executive Director. Souillard commented: “The role of communications in driving business growth and productivity is well-understood. Onecom occupies a unique position in the business telecommunications market, offering a truly converged solution with the market’s leading operators and equipment manufacturers. What’s more, Ben and the management team have a clear vision and ambition for the business and a credible plan to deliver it. We’re excited to be part of that journey.”
LDC’s heritage and experience across the technology, media and telecommunications sector is unrivalled, with recent investments including; texthelp, MSQ Partners, Amberjack, Littlefish and Evolution Funding. LDC has backed 600 management teams over more than 35 years and has £1.2bn to invest across the UK mid-market in the next three years.
The telecoms sector is enjoying rapid growth due to the continued convergence of communications services, the growth of the data economy and the UK’s expanding digital infrastructure. Telecoms is and will remain a vital service for UK businesses. Between now and 2022, business to business mobile spend is set to increase by around 4% a year. SMEs spend as much as £16 billion a year on telecoms and connectivity, so it’s a huge and growing market that Onecom operates in and is well placed to serve.