News
LDC exits Babble in £90m transaction
10 Nov 2020
Leading mid-market private equity firm LDC has exited Babble in a management buyout which values the unified communications and cyber security services provider at £90million.
LDC, which originally backed the buyout of Babble (IP Solutions at the time) in 2017, has retained a minority stake in the business to support its continued growth, alongside new investor Graphite Capital.
During its three-year partnership LDC provided nearly £9million of follow-on funding to support six acquisitions. In that time, the firm increased turnover by 230% and headcount by 200%.
Babble provides unified technology solutions for more than 2,000 small and mid-sized businesses. The company’s services include hosted telephony (VOIP), communications, cloud contact centres, mobile and enterprise connectivity.
A successful buy and build strategy has helped the business to expand its product portfolio, extend its geographic footprint across the country and consolidate its position in the UK’s unified communication market. Babble made two acquisitions in the first year of the partnership with LDC; Birmingham-based Arden Group and Direct Response Plus, completing four further acquisitions since then.
Babble’s success has also been underpinned by organic growth. The launch of its contact centre proposition and performance of its communications offering helped the firm grow fixed revenue. Supported by LDC’s Value Creation Partners, the business also won new contracts across LDC’s portfolio of mid-sized businesses.
When we chose to partner with LDC as our private equity backer in 2017, we were looking for a team with experience of working in our sector, but also one committed to supporting our acquisition strategy. The team at LDC ticked both boxes and delivered on their promises."
“LDC didn’t just buy into our business, they bought into our vision and backed us as a team to deliver it. The last three years have been transformational for Babble and we are well on our way to becoming a £100million revenue business. We’re pleased LDC is staying with us on the next stage of our growth journey.”
Chris Morris, Investment Director at LDC in the South, added: “We’ve been on a remarkable journey with Matt and his management team. Strong organic growth has been supported by a buy and build strategy that’s transformed the business and expanded its product portfolio. We’re looking forward to continuing to work alongside the team and the new investors to support their ambitious plans.”
Investment Manager Tom Jervis and Head of London Yann Souillard also supported LDC’s partnership with Babble and this transaction.
LDC plays an active role in supporting the buy and build strategies of its portfolio companies, enabling them to drive growth and market share. In the last two years, LDC portfolio companies have completed over 50 acquisitions with a combined enterprise value of more than £250million.
LDC was advised by Spectrum Corporate Finance, Gateley (legal), Analysys Mason (CDD) and RSM (FDD). Management was advised by Jamieson Corporate Finance and Osborne Clark (legal).