Clearwater Corporate Finance ("Clearwater") has advised the
management team of the UK's leading provider of telecoms services
for small businesses, XLN Telecom ("XLN"), on its secondary buyout
by mid-market private equity firm, ECI Partners ("ECI"). The deal
sees Zeus Private Equity ("Zeus PE") exit its investment in XLN
after three years, at a 4.5x investment multiple.
The investment is accompanied by a significant commitment by ECI
to support XLN's ongoing business development and acquisition
programme. As a result, XLN will have the funds available to more
than double the size of the business through acquisitions. XLN's
award-winning management team, led by founder and Group CEO,
Christian Nellemann, will continue to run the business following
the transaction.
Founded in 2002, XLN specialises in providing small businesses
in the UK with high quality, low-cost, fixed-line mobile and
internet services. In the last three years, XLN's revenues have
grown substantially from £27 million in 2007 to £54
million in 2010. In the last year, the company successfully
acquired and integrated OneBill Telecom ("OneBill") into its
operations, with additional investment from Zeus PE.
Key drivers in XLN's growth have been the management team's
successful development of an industry-leading proprietary
technology platform that allows new services to be smoothly
integrated into the business, combined with the management team's
highly focused approach to marketing, product development and
customer service innovation. Today, the company has over 115,000
business customers across Britain, with XLN now operating two
non-competing brands in the market - XLN Telecom and OneBill.
Zeus PE originally backed a management buyout of XLN in January
2008, investing £6.63 million for a majority stake. ECI has
also gone on to acquire a majority stake.
Partner, Nick Jones, led the deal team for Clearwater, supported
by assistant director, Richard Shaw, and director, Dan Bowtell.
Nick Jones said: "ECI's investment is the latest milestone in XLN's
expansion plans, and provides a platform for its strong and well
respected management team to achieve notable organic and
acquisitory growth.
"Taking into account continued consolidation in the UK and
European telecoms sector, with larger, cash-rich companies picking
up smaller rivals, this investment puts XLN in a very strong
position to further build on its acquisition of OneBill in
2009."