LDC reaps 2.8x on sale of Node4 to Bowmark

Kenny Wastell
05 October 2016

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Mid-market private equity house Bowmark Capital has backed the secondary buyout of IT and communications business Node4 Holdings from LDC.

The deal represents a 2.8x return for LDC following a holding period of just three years.

Bowmark has acquired a majority stake as part of the deal, with the company's management team holding the remaining shares.

Under LDC's tenure, the business undertook a buy-and-build growth strategy, acquiring Reconnix in March 2015, Premier IT Networks in August 2015 and LETN Solutions in August 2014.

The company will continue pursuing an acquisitive strategy under its new owners, with an additional £40m in follow-on debt and equity funding set aside to finance bolt-ons.

Previous funding
LDC backed the management buyout of Node4 in May 2013. RBS supported the deal with a senior debt package and growth capital expenditure facilities.

Company
Founded in 2004 and headquartered in Derby, Node4 is an IT company and data centre operator. The company generated a turnover of £28m in the year to March 2016, up from £13m at the time of LDC's initial investment. It has also tripled its headcount under LDC's stewardship and now employs 184 people.

Node4 has offices in London, Reading and Newark, as well as data centres in Derby, Leeds, Northampton and Slough.

People
Bowmark Capital – Stephen Delaney (investment director).
LDC – Martin Draper (chief executive).
Node4 Holdings – Andrew Gilbert (chief executive).

Advisers
Equity – KPMG (financial due diligence); King & Wood Mallesons (legal); Altium (debt advisory).
Company – PwC (corporate finance); Pinsent Masons (legal).