News
27/09/2006
2e2 Group Ltd Announces secondary funding with Duke Street Capital
New deal to support international expansion and continued acquisition strategy
2e2 Group, a leading provider of IT managed services, announces today a secondary funding of the Company valuing the business at approximately £130m. The new funding is being provided by Duke Street Capital (“DSC”), the mid-market private equity fund manager, and will see the exit of incumbent VC, Gresham Partners.
DSC is backing the existing management team, led by Terry Burt, which has built up 2e2 through the execution of an aggressive acquisition strategy resulting in a series of astute acquisitions since it was founded in 2002. This amalgamation of these companies and consequent increased scale has put the Company in a strong market position. To date, this has enabled the Company to bid for, win and deliver IT managed services and infrastructure contracts for major organisations such as British Airways, Allen and Overy and British Energy.
Given the fragmented nature of the market place 2e2 is well-positioned to further build on its market position and be a consolidator in the industry, a strategy that DSC intends to back with capital and its expertise in this area.
Terry Burt, CEO of 2e2, commented, “We are delighted to receive the backing of DSC and our new banking partner, Bank of Scotland. DSC has the right credentials and culture to help our transition to the next stage. This is fantastic news for our customers and staff which has greatly enhanced the capacity to realise our plans.”
2e2, which has operations in the UK, Channel Islands, Benelux and the Isle of Man, operates in a number of fast growing and highly innovative markets. It has a leading position in internet telephony and converged communications and is building scale in the data storage and security markets. Revenue for 2006 is expected to be £155m and the business has been growing organically in excess of 20% per annum.
John Harper, Partner at DSC, commented, “Terry and his team have a great track record of creating value and we are delighted to be backing them. 2e2 has excellent growth prospects, both organic and by acquisition. The powerful combination of this management team’s vision with the support and resources of Duke Street will keep 2e2 at the forefront of its industry.”
The new investment by DSC will significantly strengthen the Company’s financial and market position and enable it to accelerate its plan to expand on an international basis. The Company is currently examining a number of acquisition targets both in the UK and abroad, in particular, looking at the Scandinavian region.
The new funding will also enable the Company to develop and provide new and improved services to their customers providing them with greater business advantage in the market in which they operate. In addition, it is anticipated that further benefits will be realised, for example, in retaining and hiring of new talent and importantly, in being better positioned to bid for major industry contracts.
ENDS
ENQUIRIES:
2e2 Group Limited
Tel: 0870 850 7059
Terry Burt, Chief Executive Officer
ICIS Limited
Tel: 020 7651 8688
Tom Moriarty / Laura Cocker
About 2e2
2e2’s mission is to be regarded as the most respected provider of innovative technology services and solutions that create exceptional business advantage for our customers. 2e2 provides an extensive range of services aligned across four principal areas of business:
- Unified communications
- Data Management
- Server and Client
- Managed Services
2e2’s vision is to be a company whose integrity, performance, quality and care for its customers and employees is second to none. Their expertise, passion, innovation and agility will differentiate them and ensure they are the partner of choice.
2e2 was established in 2002 and has grown into one of the most respected and high-quality IT services providers in the UK and the Netherlands. With the support of Duke Street Capital, the mid-market private equity fund manager, and Bank of Scotland, 2e2’s mission is to be a major IT Services partner in the UK and selected European markets and to achieve revenues of £450m by the end of 2009. 2e2 has £156m of annual run-rate revenues and over 1200 staff in the UK and the Netherlands.
About Duke Street Capital
Duke Street Capital is an independent private equity firm with offices in London and Paris. It was founded in 1988 and focuses on mid-market leveraged buy-outs, investing in established UK and French businesses with enterprise values of up to €300 million.
Duke Street has raised 5 private equity funds to date totalling in excess of €2 billion.
DSC considers all investment opportunities, but particularly focuses on the retail & consumer, leisure, healthcare, financial services and business services sectors.
DSC has a proven model of value creation by successfully transforming businesses through implementing operational change and making over 30 build-up acquisitions.
Recent transactions include the exit from Marie Brizard, a leading French drinks company; the acquisitions of Buckingham Foods, Thomas Food Group and Food Partners; the acquisition of Deloro Stellite; the sales of Sporting Index and of Financière Galaxie, the owner of B&B hotels; the acquisitions of Proclif, the Paris-based hospital operator; Xafinity, the Benefits and Consultancy Services Group which was previously a division of Hogg Robinson; Equity Insurance Group, the motor and personal lines insurer (formerly Cox Insurance) and Affinity Healthcare, a leading regional operator of psychiatric hospitals.
