Lincoln-based GCI Com provides internet telecoms and data services and has made 19 ‘strategic’ acquisitions since its foundation in 2000. It has a reported turnover of £65 million and employs 220 staff in nine UK bases.
The deal is set to allow for GCI Com’s organic growth and ‘active acquisition strategy’. In return the BGF is taking a minority stake in the company.
As part of the deal John Cronin is to join GCI Com as non-executive chairman. Cronin’s previous roles include senior roles at Arqiva Broadcast, Azure Solutions and BT.
Wayne Martin, founder and CEO of GCI Com, says, ‘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.’
Martin adds that the injection of capital and experience will help GCI Com to consolidate its progress. He says that historically the business has had to rely on bank debt or company cash reserves to finance its growth.
‘The thought of private equity 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 investment as a partner and long-term equity investor to realise the ambitions that I have for it,’ he adds.
According to the BGF, it is on course to invest in 20 companies in 2012, and 30-40 investments per year on a ‘sustainable basis’ in the longer term.
To date it has backed three companies with investments totalling £12.95 million, including deals with Benefax and Unruly.
Richard Bishop, BGF head of investments, comments, ‘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.’