LDC sells Babble to Graphite for £90m

This is the fifth investment from Graphite Capital Partners IX, which closed on £470m in July 2018. The vehicle focuses on UK mid-market companies with enterprise values of £30-150m, as well as smaller companies with expansion potential.

LDC retains a minority stake in Babble and the management team is reinvesting a substantial proportion of its proceeds. The company will continue to be led by chief executive Matt Parker.

The vendor was preparing the sale in September 2020, and may have been marketed based on EBITDA of around £7-8m, according to Unquote sister publication Mergermarket; however, previous reports suggested the company posts EBITDA of approximately £4.5m.

Babble has a pipeline of potential acquisitions that are expected to expand its range of products, services and customers, according to a statement.

Previous funding
Livingbridge made a £5.74m investment in IP Solutions, as Babble was then known.

LDC invested in Babble in 2017.

During LDC's holding period, the company acquired Arden Group, Direct Response Plus, Diva Telecom, Lake Technologies and CMT through funding provided by LDC. The company, which will continue to pursue a buy-and-build strategy, has a £100m revenue target.

Company
Based in London and founded in 2001, Babble supports medium-sized companies operating in a wide range of sectors including financial services, healthcare, education, travel, accommodation and public services. It offers unified communications, cloud contact-centre services and cybersecurity. In July 2020, the company had a run rate of £22m in annual revenues on a pro-forma basis, according to Mergermarket.

People
Graphite Capital – Humphrey Baker (partner); Lara Markham, Tony Saade (investment directors); May Sulaiman (investment manager); Zoe Jackson (investment executive).
Babble – Matt Parker (CEO).

Advisers
Equity – Alantra, James Chapman-Andrews, Oliver Norman, Luke Parvin, Milan Vashi and Joe Carpenter (corporate finance); Travers Smith, Ian Keefe, Emma Havas, Donald Lowe (legal); Spectrum Corporate Finance, Simon Sherliker, Stuart Sweeney, Julie Lada (debt advisory); BDO, Derek Neil, George Byron (financial due diligence); CIL, Tom Fletcher, Anthony Crutchett (commercial due diligence).
Company – Spectrum Corporate Finance (corporate finance).

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• Topics
• Exits
• Buyouts
• UK / Ireland
• Technology
• Graphite Capital
• Secondary buyout
• LDC
• United Kingdom
• Travers Smith
• Alantra
• BDO LLP