LDC reaps 4x on Metronet sale to Isis

Alice Murray
30 June 2014

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LDC has sold internet services provider Metronet to Isis Equity Partners in a ТЃ45m tertiary buyout, generating a 4x return.

Under LDC's ownership, Metronet has increased its turnover by 98% and EBITDA has grown by 83%.

Isis invested via its fifth fund, Isis V, which closed on £360m in 2012. Isis will support the firm's expansion into new geographical markets across the UK and in its goal to build a comprehensive UK-wide wireless network.

Previous funding
LDC acquired Metronet in June 2012, investing £11m in the company, which was understood to have an enterprise value of around £15m at the time of the transaction. LDC purchased the company from YFM Equity Partners and Acceleris Corporate Ventures, in a deal that generated 5.5x for YFM.

YFM invested £1.1m to support the management buyout of Metronet in 2004, investing through the North West Business Investment scheme.

Debt
The acquisition finance team at Lloyds Bank Commercial Banking provided senior debt facilities to support Isis's acquisition.

Company
Manchester-based Metronet is a business-only internet service provider, combining both wireless and traditional fibre technologies to deliver connectivity to multi-site companies. The company also offers cloud based hosting services, 3G connectivity and CCTV services.

Established in 2003, Metronet today has offices in Manchester, Lancashire, Cheshire, Liverpool, Leeds and Birmingham. Its network currently covers the North West, including Greater Manchester, Liverpool, Chester, St Helens, West Yorkshire and the Midlands.

Metronet's clients include Lang O'Rourke, Autotrader, Capgemini and Umbro.

People
Elloitt Mueller is CEO of Metronet. James McCall founded the business. Matthew Caffrey and Mark Advani of Isis have joined the company's board as part of the transaction. Jonathan Bell is director and co-head of LDC in the North West.

Advisers
Equity - Oakley Capital, James Chapman-Andrews, Anthony Yaneza (Corporate finance); Pinsent Masons, Gregg Davison, Andrew Phillips (Legal); LEK, Larry Verge, Maria Palm (Commercial due diligence); PwC, Jonathan Cooper, Graham Watson (Financial due diligence).
Company - Altium, Stuart Lees, Phil Adams, Dominic Orsini (Corporate finance); Gateleys, Paul Jefferson (Legal).