LDC backs MBO of Node4

Ellie Pullen
28 May 2013

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LDC has backed the management buyout of UK-based IT and communications services provider Node4 Ltd.

The deal was supported by a senior debt package and growth capital expenditure facilities, both provided by RBS.

The transaction will see LDC make a number of non-executive appointments to Node4's board. The company's existing managing director and co-founder, Andrew Gilbert, will retain a significant stake.

LDC had been building a relationship with Gilbert over the three years preceding the deal to acquire an in-depth knowledge of the company. Node4's rapid growth since its launch and its position in the marketplace attracted LDC to the business.

According to LDC, the deal is a similar size to the £24m MBO of NRS Healthcare in April. The capital injection will allow Node4 to consider acquiring other businesses that offer similar services, as well as open new data centres.

The deal allowed some of Node4's existing shareholders to fully exit the business - these are understood to be investors that injected capital in the company's early stages.

The acquisition of Node4 marks LDC's eighth deal of 2013. Recent transactions include the previously mentioned NRS Healthcare, as well as the £50m MBO of D&D London and the £12m MBO of Validus-IVC.

Company
Founded in 2004, Node4 is based in Derby with additional offices in Leeds and Northampton. The company employs 60 staff and has a turnover of more than £13m.

Node4 offers managed IT and data centre services, including managed hosting, virtualised environments, cloud services and hosted telephony. Node4 currently provides its services to a customer base of 700 SMEs.

People
Andrew Gilbert is Node4's co-founder and managing director. David Goldie, previously chief executive at TalkTalk Group, will join Node4's board as a non-executive chairman, along with Bernie Walrdon, who will join as a non-executive director.

Martin Draper, regional managing director at LDC, led the deal for the firm alongside investment directors Andy Lyndon and James Robinson. Draper will also join Node4's board following the transaction.

Advisers
Equity – KPMG (Financial due diligence, tax); Browne Jacobson (Legal).
Company – PwC (Corporate finance); Pinsent Masons (Legal).
Debt – Eversheds (Legal).