Palatine acquires The Bunker from Foresight

Kenny Wastell
11 July 2017

Tweet
Facebook
LinkedIn
Google plus
Send to

Palatine Private Equity has acquired UK-based IT business and Foresight Group portfolio company The Bunker.

The company's existing management team, led by Phil Bindley, will remain in place following the deal, while ADMH Consulting director Andy Hague has been appointed as CEO.

Since Foresight first invested in the business 11 years ago, The Bunker has invested in the expansion of its data storage facilities. According to a statement, the company has grown its recurring revenues by an average of 14% per year over the last three years.

In April 2015, the company completed a recapitalisation that fully repaid outstanding shareholder loans. Following the recapitalisation, Foresight retained a 31% equity holding in the company. The GP's total loan investment of £3m returned £5.13m to Foresight 2 VCT, Foresight 3 VCT and Foresight 4 VCT, representing a 1.8x return.

Under its new ownership structure, The Bunker will undertake an acquisitive growth strategy in order to expand into a full-service cybersecurity firm.

The deal is the fifth transaction completed with capital drawn from Palatine's third fund, which held a final close on its £220m hard-cap in June 2015. It leaves the fund more than 40% committed, unquote" understands.

It is also the third transaction completed by the GP in quick succession, having backed road safety training company TTC Group and sold private medical insurance provider Chase Templeton to Nevada Investments in recent weeks.

A spokesperson for Palatine declined to comment on the valuation.

Debt
European Capital and Santander provided debt facilities to support the transaction.

Previous funding
Foresight first invested in The Bunker in May 2006, with capital drawn from its Foresight VCT and Foresight 4 VCT.

Company
Headquartered in Sandwich, Kent, The Bunker is an IT business focusing on consultancy, installation and support services related to secure cloud infrastructure and hosting. The business employs around 70 people and is based across three sites in Ash, Newbury and central London. It serves clients from across the UK.

The Bunker generated EBITDA of £2.3m in 2015, according to publicly available documents, with a turnover of £9.6m.

People
Palatine Private Equity – Tony Dickin (partner); Andy Strickland (investment director); Rupert Brown (investment manager).
Foresight Group – Tom Thorp (director).
The Bunker – Andy Hague (CEO).

Advisers
Equity – BDO (corporate finance); Gateley (legal); RSM (tax); CIL (commercial due diligence); Marsh (insurance due diligence); The Berkeley Partnership (management due diligence).
Vendor – Bird & Bird (legal); Deloitte (corporate finance); RSM (financial due diligence).