Bowmark Capital acquires CSL in £32m SBO

Diana Petrowicz
09 January 2012

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Bowmark Capital has backed the secondary buyout of security communications company CSL DualCom with ТЃ32m.

The investor took a majority stake in return for £13m of equity and is looking to further grow the business in existing and new markets overseas and in adjacent sectors.

The vendor, Octopus, originally invested in June 2006 and the investment has returned 4.3x cash. This represents an IRR of 38% for its funds.

Debt
Octopus, which first invested about three years ago, has extended its debt structure to £10m as part of the SBO. Stuart Nicol managed the mezzanine facility for Octopus.

Previous funding
Octopus invested in CSL in 2006 for an enterprise value of £6m. During the holding period, CSL increased its turnover from £5m to £11m in the fiscal year ending in 2012 and managed to double its workforce. The growth was mainly achieved by an increase in market share.

Company
CSL supplies dual-path security alarm signalling devices in the UK. A dual-path system is more reliable than a single telephone line and growth in the company is anticipated as insurance companies increasingly demand more risky commercial premises be fitted with such a device. Established in 1995, CSL is headquartered in Harefield, Middlesex, and employs a staff of 50. The firm is expected to realise a turnover of £11m and an EBITDA of £3.8m by the fiscal year ending in March 2012.

People
Mark Salter is senior partner and Paraag Davé is investment director at Bowmark. Both of them will join CSL's board. Jane Vinson worked on the deal for Octopus.

Advisers
Vendor – Baker Tilly, Rob Donaldson (Corporate finance); Berwin Leighton Paisner, Geraint Lloyd (Legal).
Equity – BDO, Chris Grove (Financial due diligence); Latitude, Steve Hacking (Commercial due diligence); SJ Berwin, Jonathan Pittal, Tara Bano (Legal).
Management – Olswang, Stephen Rosen (Legal).
Debt – Wragge & Co, Jonathan Segal (Legal).