Bowmark mulls sale of Focus Group via Houlihan Lokey

Dominic Pasteiner , Charlie Taylor-Kroll , Gustav Hoejmark-Jensen and Kezia Joseph
19 June 2023

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Bowmark Capital is mulling a potential sale of the communications and IT solutions company Focus Group, sources familiar with the situation said.

Houlihan Lokey has been appointed to explore sale options for the London-headquartered IT, telecoms and connectivity specialist, two of the sources said.

While a final decision is yet to be made, a full sale of the business could take place in the first half of 2024, around four years after Bowmark acquired a significant minority stake in the business, one source said. Deliberations remain at an early stage, this source added.

The company's co-founder, Chris Goodman, and members of its management team retain a substantial shareholding alongside Bowmark.

Focus Group had a score of 55 out of 100, according to Mergermarket's Likely to Exit algorithm* on the day of publication (15 June). Driving the score is that it has been held for 1189 days by Bowmark, 345 days since its most recent signed loan and 136 days since its last bolt-on acquisition.

In the event of a sale, the company is expected to be marketed off an EBITDA run-rate of over GBP 45m, one of the sources said. The company generates more than GBP 150m in revenues, according to its website.

Focus Group has grown significantly since Bowmark's investment both via organic growth and M&A, one of the sources said. The company has seen high single-digit growth, the source added.

Since Bowmark's investment, Focus Group has acquired several UK headquartered businesses including telephone systems and internet solutions provider Resource Telecom Group, UK telecom provider swcomms and communications specialist Evad. In January this year, Focus also announced a strategic investment in Zest4, a UK-based unified communications provider.

Bowmark Capital acquired a significant minority stake in Focus Group in March 2020. Oakley Advisory, which was acquired by Houlihan Lokey earlier this year, advised on the previous transaction.

Founded in 2003, the company provides telecom and IT business services to mid-market and enterprise clients in the public and private sectors.

Representatives for Bowmark, Focus Group, Houlihan Lokey and Oakley declined to comment.

*Based on a number of key industry, holding behaviour, and dealflow criteria, Mergermarket's next-generation platform assigns a Likely to Exit (LTE) score to each exit opportunity, with a higher score corresponding to a higher likelihood for an imminent transaction.