Spectrum Corporate Finance and Gateley Legal have successfully advised mid-market private-equity firm LDC and unified technology solutions provider Babble, on the sale of the business in a secondary management buyout backed by Graphite Capital Partners.
Babble provides unified technology solutions for more than 2,000 small and mid-sized businesses. The company’s services include cloud collaboration and communications, cloud contact centres, cyber security, mobile and enterprise connectivity.
Spectrum supported LDC through the original buyout of Babble (previously IP Solutions) in 2017. During its three-year partnership LDC provided nearly £9 million of follow-on funding to support six acquisitions. In that time, the firm increased turnover by 230% and headcount by 200%.
Corporate partner at Gateley Legal, Andrew Peddie led the deal for Gateley. He said: “This transaction represents the culmination of a great deal of hard work over a long period on the part of the Babble team, the investors and the professional advisers involved on all sides. We were really pleased to have been appointed to act for both the selling shareholders of Babble as well as LDC on their re-investment.
“Both Babble and LDC are long-standing clients of ours and it was great to help them complete this deal and facilitate the next stage of the journey for Babble. Graphite Capital’s new investment will enable the company to expand its client base and diversify its services, and LDC retaining a minority stake in the business will also allow it to contribute further to Babble’s continued progression and development, as it has done since 2017.”
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 including Birmingham-based Arden Group, a deal which Spectrum also advised on, and a further four deals in 2020.
This year Spectrum was appointed by LDC and Babble to conduct a full sales process, which involved finding a suitable private-equity partner to back Matt Parker’s vision for the future growth and buy-and-build strategy, in support of the secondary buyout. In addition, the Spectrum debt advisory team undertook a comprehensive lender education process to support the private-equity bids and demonstrate the strong appetite for deal support from debt providers.