BGF in first Mids deal
The Business Growth Fund (BGF) has made its first investment in the Midlands in an agreement with Lincoln-headquartered GCI Telecom Group.
The Birmingham-headquartered fund has invested £10m of equity capital in the telecoms and data services provider to support the group's organic growth and acquisition strategy.
GCI Com, which was founded by chief executive Wayne Martin in 2000, has a turnover of almost £65m and employs 220 staff across nine UK locations, including Derby, Shrewsbury, Salford, Wakefield, Wiltshire and London.
The group has grown rapidly since its formation with 19 strategic acquisitions in the past 12 years.
Backed by five of the UK's main banking groups, the BGF has been established to help fast-growing small businesses. The fund invests between £2m and £10m in return for a minimum 10 per cent equity stake and a seat on the board for a BGF director.
Richard Bishop, BGF head of investments, said: "GCI Com is the first investment that BGF has made in the Midlands. We believe that there are many high quality businesses across the Midlands, like GCI Com, which have real potential but which have not obtained the funding that they need, and we therefore expect this to be the first of many BGF investments in the region.
"With capital at our disposal, we have the means to significantly expand the market for investment in small and medium sized businesses."
John Cronin will join GCI Com as non-executive chairman. He has had senior roles at Arqiva Broadcast, Azure Solutions, NetSource Europe, Teleglobe, Kast Telecom, Mercury Communications and BT.
Cronin was introduced to the business by recruitment Mallory Partners.
"BGF's investment is a major milestone for GCI Com. It gives us the opportunity to significantly build scale and service diversity at a time when our clients need it and the market conditions are ripe for growth," founder Wayne Martin said.
"For us, BGF's offer made good business sense. We have worked very hard over the past 12 years to build up a range of specialist services and wide network footprint to best service our customer base. The injection of capital and objective operational experience will help us to consolidate the progress we have made to date and continue our active acquisition programme.
"In the past we have relied on bank debt or company cash reserves to finance our growth. The thought of private equity backing had not particularly appealed. BGF made us think differently. I haven't ceded control of my business, but am in a stronger position because of their involvement as a partner and long-term equity investor to realise the ambitions that I have for it."
BGF was advised on the deal by Wragge & Co and BDO. GCI Com was advised by Eversheds, Latitude Partners and Intuitus.
