GCP invests in Arrow Business Communications

Kenny Wastell
01 September 2016

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Growth Capital Partners (GCP) has acquired a 50% stake in UK-based enterprise communications provider Arrow Business Communications.

GCP told unquote" the investment consisted of a mixture of new and existing shares, with the transaction conducted via a newco.

In a statement, Arrow said the transaction includes a "significant acquisition fund", which will enable it to ramp up its existing acquisitive growth strategy. The business has made seven acquisitions over the past six years, most recently bolting on Cambridge-based Comms-Solve in July 2016.

Following the deal, Arrow's management team will own the remaining 50% stake in the company.

The deal marks GCP's second investment in the communications sector in the space of three months. In June, it invested £23.3m in telecoms infrastructure maintenance company John Henry Group.

The UK enterprise communications segment has received significant support from private equity players in recent months. In August, Beech Tree Private Equity backed the £35m management buyout of Solihull-based Wavenet, while June saw two such deals: Livingbridge backed Basingstoke-based Southern Communications and FPE Capital invested in London firm Optimity.

Company
Founded as a spinout from Sony Communications in 2003 and headquartered in Godalming, Surrey, Arrow is a business-to-business provider of fixed-line and mobile communications, as well as IT support. The company has four additional offices located in Worcester, Newton-le Willows, Cambridge and Aberdeen.

The business generated a turnover of £24.6m in 2015, with EBITDA of £3.5m.

People
Growth Capital Partners – James Blake (managing partner); Richard Shaw (investment director); Jim Sellars, Ravi Monteiro (investment managers).
Arrow Business Communications – Chris Russell (CEO).

Advisers
Equity – Dickson Minto, John Pentland, Michelle McCabe, Neil Souness (legal); Knight Corporate Finance, Paul Billingham (corporate finance); EY, Ian Kelly, Isaac Mullholland, Cary Wilson, Neville Crowe (financial due diligence); Analysys Mason, Charles Murray (commercial due diligence).
Management – Kemp Little, Charles Claisse, Glafkos Tombolis (legal).
Company – GCA Altium, Stephen Georgiadis (corporate finance).