Isis reaps 4.8x on sale of CableCom to Inflexion

Karin Wasteson
28 October 2013

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Isis Equity Partners has sold CableCom Networking, a UK-based internet and digital media services provider, to Inflexion Private Equity, reaping a 4.8x return.

The deal saw Isis reinvest on behalf of the Baronsmead VCTs for a minority stake in the business.

Isis contributed £5.6m to the £11.5m MBO of CableCom, led by Mark Burchfield, in May 2007. Isis held a 48% stake following the limited auction process. Debt facilities were provided by Royal Bank of Scotland.

During its holding period, Isis hired commercial, finance and operations directors; developed a digital portal allowing landlords and tenants to communicate; and expanded the reach of CableCom's services beyond the core student market and the UK.

CableCom's turnover has grown from £4.8m in 2007 to £17m in 2012, while the number of users has increased from 13,000 in 2007 to 250,000 in 2012.

Under Inflexion's ownership, CableCom will seek to expand across Europe, starting with its operations in the Netherlands. The company will also improve its product offering and increase its investment in technology. The growth opportunities in social housing and in lower-density student accommodation will also be accelerated.

The student market within which the company operates is expected to grow significantly between 2012 and 2017, according to Inflexion.

This constitutes Inflexion's third investment in October, following the MBO of software company CMO Compliance and the SBO of online travel agent On The Beach – another investment sourced from Isis. Inflexion targets deals with an enterprise value between £10–100m.

Company
Founded in 1993 and based in Clevedon, CableCom designs, installs and manages networks required to provide broadband connectivity and digital media services to student accommodation, social housing and key-worker accommodation. Its two main digital media platforms are StudentCom and LivingCom.

CableCom provides digital media services to more than 500 locations in the UK. Clients include MediaCity UK, Unite, UPP and Thames Valley Housing Association, the University of Exeter and the London School of Economics.

People
Paul Morris is a partner at Isis and led the initial investment in CableCom. Simon Turner is managing partner at Inflexion. Mark Burchfield is the CEO of CableCom.

Advisers
Vendors – PwC (Corporate Finance); Olswang (Legal); Momentum Corporate Finance (Management Advisory).