Data Connection Ltd (United Kingdom) - Jan 2008

unquote
01 January 2008

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London and San Francisco-based venture capital firm Francisco Partners has led an expansion funding round for telecommunication networking company Data Connection Ltd. Strategic partner Sequoia Capital, a prominent Silicon Valley-based investor, also participated in the investment, which was sourced through Data Connection’s financial adviser Wachovia Securites. The new investors were attracted to the deal by both the quality of the management team and the remarkably impressive financial performance of the company, which has grown revenues every year since its inception in 1981, with profit always exceeding 15% of turnover. Deep Shah, principal at Francisco Partners, described this as “no mean feat” in an industry that has suffered various trials and tribulations over the years, adding that he believed there was still room for substantial further growth. The new capital will be used to continue the company’s on-going organic expansion, although Shah did suggest it would give consideration to any potential acquisition opportunities. The Data Connection Employee Benefit Trust, which was previously the sole shareholder in the business, retains a major interest.

Company

Data Connection is a specialist provider of telephony and communications technology products, as well as complete telecommunication solutions via its MetaSwitch division. The business has built an impressive customer base that includes major global technology vendors, such as Alcatel-Lucent, Cisco, IBM and Microsoft, as well as carriers such as AT&T, Sprint, Qwest and BT. Data Connection is headquartered in London and has offices situated throughout the US, currently employing 400 staff and generating turnover in excess of $100m.

People

Benjamin Ball and Deep Shah led the investment for Francisco Partners, while Jim Goetz represented Sequoia. All will join the Data Connection board. Ian Ferguson is the chairman of the company.

Advisers

Company - Linklaters, (Legal)Company - Wachovia Securities, (Financial Due Diligence)Equity - Morgan Stanley, (Financial Due Diligence)Equity - Slaughter and May, (Legal)

Sourced from: UK & Ireland unquote" 361 (Jan 2008)