ECI buys Wireless Logic for £38m

The deal was originated by corporate finance adviser PricewaterhouseCoopers, which introduced ECI to the company.

Wireless Logic was impressed by the investor's knowledge of the telecommunications and IT sectors, especially as it acquired XLN Telecom, a supplier of fixed-line, mobile and broadband services, last year. The private equity firm also moved quickly, underwriting the debt and completing the transaction in the week after being granted exclusivity.

ECI, meanwhile, was attracted to the deal due to the company's status as the largest independent operater in the machine to machine (M2M) communications sector – with a 15-20% market share. It was also ranked 25th in last year's Sunday Timesʼ Tech Track league table of the UKʼs fastest-growing private technology companies.

The M2M market is expected to experience growth of more than 30% per year, while rapid expansion is also forecast in other sectors which have developed on the back of M2M technology, such as vehicle tracking, smart utility metering, healthcare and security.

Plans to drive value at the company include developing its software platform, expanding its products and services, gaining extra market share in the UK and expanding elsewhere into Europe. Germany will be the first priority overseas, followed by Spain, France and Italy.

ECI invested via its ninth fund, which closed on £430m in December 2008.

Debt
The leverage for this deal is currently being structured.

Company
Buckinghamshire-based Wireless Logic is a UK M2M communications specialist, with 3,600 customers and more than 500,000 SIM cards under management. It provides wholesale data airtime from mobile network operators across 68 countries, which it combines with its own billing, monitoring and security services.

The company employs 19 people and was founded in 1999. It generated a turnover of £8.2m in 2010 and has already registered sales of £11.5m this year.

People
Chris Warren, director, led the deal for ECI Partners alongside investment manager Paul McCreadie. Warren joins the company's board as a director. Founders Philip Cole and Oliver Tucker are the respective sales and marketing director, and managing director of Wireless Logic.

Advisers
Equity – PricewaterhouseCoopers, Richard Miller, Philip Shepherd,
Georgina Hudson, David Burke (Corporate finance, commercial, financial & tax due diligence); Grant Thornton, Richard Joyce (Operational due diligence); Burges Salmon, Richard Spink (Legal); The Quinn Partnership, Paul Quinn (Management due diligence); Heath Lambert, Nairn Lickrish (Risk and insurance due diligence).
Company – KPMG (Financial due diligence); Osborne Clarke, Matthew Lewis, Mark Wesker (Legal).

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• Topics
• UK / Ireland
• Technology
• Buyouts
• ECI Partners