Bregal invests in Redstor; Beech Tree exits

Harriet Matthews
11 January 2022

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Bregal Milestone has invested in UK-based data management platform Redstor; the deal sees previous shareholder Beech Tree Private Equity fully realise its investment.

Bregal Milestone and Redstor founder Paul Evans will own a controlling stake in the company.

Beech Tree Private Equity acquired Redstor in November 2017, investing via Beech Tree Private Equity Fund II. The fund held a final close in June 2017 on GBP 115m, and writes equity tickets of GBP 10m-40m, aiming to back businesses in fast-growing sectors. Clydesdale and Yorkshire Bank provided debt to back the buyout.

During the investment period, Beech Tree assisted Redstor with the expansion of its product capabilities, including cloud applications and artificial intelligence, the GP said in a statement. The company also developed its sales and marketing strategy.

The deal is the second investment from Bregal Milestone II, which the GP registered in July 2021, as reported. The fund is expected to follow the strategy of its predecessor, generally investing EUR 20m-60m in Europe-based technology, healthcare, business services, consumer, high-value manufacturing and financial services. Bregal Milestone makes investments in the form of growth capital, structured equity, and debt, but can also make buyout deals.

Bregal's growth plans for Redstor include supporting the company with its expansion to the US.

Company
Founded in 1998, Redstor is a data management platform that allows managed service providers (MSP) and channel companies serving the mid-market to manage and protect customer data. Its software aims to combat ransomware and malware attacks, as well as reduce downtime and to ensure that companies adhere to global regulatory data protection standards.

The company reported revenues of GBP 9.45m and EBITDA of GBP 1.15m at the time of its acquisition by Beech Tree. According to its latest publicly available financial statements, it posted 2020 revenues of GBP 9.2m and gross profit of GBP 4.8m, versus GBP 8.8m in sales and revenues of almost GBP 4.8m in 2019.

People
Beech Tree Private Equity – Ben Cartwright (investment director).
Redstor – Paul Evans (CEO).
Bregal Milestone – John Hales (principal).

Advisers
Vendor – Results (corporate finance); Osborne Clarke (legal).
Equity – Goodwin (legal); Deloitte (financial due diligence, tax); Endava Private Equity Group (technology due diligence).