Westbridge acquires ISG from RJD in £10.5m deal

Kenny Wastell
11 July 2016

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Westbridge Capital has acquired British IT business ISG Technology from RJD Partners in a ТЃ10.5m secondary buyout.

Octopus Investments has also taken part in the deal, with the acquirers investing a combined £9m in equity.

Under its new owners, the company will look to expand its range of services and invest in marketing activity.

Upon completion of the transaction, Westbridge partners Sandy Smart and Valerie Kendall will take a seat on the ISG board.

During RJD's 11-year tenure, the business developed a new support centre in Bulgaria, which was subsequently expanded in 2011. It also made a number of senior appointments and in 2014 undertook a relaunch, with greater emphasis on cloud-based technology and social enterprise.

The company refinanced as part of its relaunch, securing a £7.5m facility from Pittsburgh National Credit.

Debt
Barclays Bank has provided £4.5m of senior facilities to support the latest deal.

Previous funding
RJD (at the time known as Royal London Private Equity) backed the £17m management buyout of ISG from its founders in March 2005, according to unquote" data. The firm acquired a majority stake, with Lloyds TSB providing a £10m debt package to support the deal.

ISG had previously received support from 3i in 1997, to support its merger with Webb Electronics & Communications.

Company
Founded in 1982 and headquartered in Egham, Surrey, ISG provides IT services to clients including retailers, government bodies, restaurants and telecommunications companies. The business, which focuses primarily on large-scale wifi installation, generated a turnover of £18.5m in its most recent financial year.

ISG has a headcount of 173, down from 220 at the time of RJD's acquisition.

People
Westbridge Capital – Sandy Smart, Valerie Kendall (partners).
ISG Technology – Mike Morrison (CEO).

Advisers
Equity – PwC (financial due diligence); Armstrong (commercial due diligence); Diligencia (management due diligence); Capital Law (legal); Willis Towers Watson (insurance due diligence); Grant Thornton (corporate finance); Deloitte (corporate finance); Lewis Silkin (legal); Shakespeares (legal); Osborne Clarke (legal).