Growth Capital Partners backs secondary MBO of Indigo

Christopher Papadopoullos
07 December 2018

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Growth Capital Partners (GCP) has backed the secondary management buyout of Indigo Telecom Group.

The capital will be used to accelerate growth, including further buy-and-build activity. GCP said Indigo's breadth of service and wide geographic footprint enabled the group to provide critical infrastructure support to a variety of international network operators and technology enterprises.

It is the sixth deal for GCP's fourth fund, which closed last year on £205m. Other assets in the fund include outdoor equipment retailer AMG Group, telecoms firm Arrow Business Communications, IT firm DMW Group, recycling business First Mile, and engineering recruitment firm Shorterm Group. The fund was 38% deployed prior to the latest deal, according to Unquote Data. The fund also had a an investment multiple of 1.03x as of March 2018.

Previous investors Maven Capital Partners and YFM Equity Partners fully exited Indigo as part of the transaction. Maven and YFM reaped a 4.2x multiple on their original investments.

Previous funding
Maven and YFM invested in the £12m management buyout of Indigo in July 2016.

The company went on to acquire Bellcom UK and its subsidiaries in September 2017.

Company
Founded in 2009 and headquartered in Monmouthshire, south Wales, Indigo installs and maintains fixed-line, broadband and mobile networks for the consumer, enterprise and corporate markets.

Indigo generated turnover of £16.2m in the 12 months ending in April 2018, up 30% on the previous year, and EBITDA of £1.1m, up from £315,000 the previous year. According to a statement by Maven and YFM, turnover for 2018 is expected to be £30m, with underlying profit of £4m.

Indigo employs 100 staff.

Advisers
Vendors – Cavendish Corporate Finance, Jon Edirmanasinghe, John Farrugia, Mike Dinsdale (M&A); Mills & Reeve, Peter McLintock, Junaid Haroon (legal).