Leading mid-market private equity investor LDC, has backed the management buyout of data and network security specialist Phoenix Datacom.
The partnership with LDC will support the existing management team – led by Managing Director, John Carson – to expand Phoenix Datacom’s suite of hardware and software products and related services to help its enterprise customers further enhance their cyber-security. LDC’s backing will also help the team to explore complementary acquisitions.
Buckinghamshire-based Phoenix Datacom provides solutions and services to improve on-premise and cloud application performance and cyber-security for major UK organisations across a range of sectors. Established in 1984, it has a list of longstanding blue-chip clients which includes leading financial institutions, network operators, media businesses, broadcasters and public sector organisations.
The business plays a key role in helping organisations to build, validate and optimise their networks and secure their most critical information. With a range of solutions and a high degree of technical expertise, Phoenix Datacom is well placed to support major businesses in their digital transformation as they scale their networks and improve their defences against the increasing risk of cyber-attack. Over the past three years, its revenue has increased by 48% to more than £20million in the financial year ending March 2020.
The investment was led by LDC Investment Director, Chris Morris, Head of LDC in the South, Lawrence Dean, and Investment Executive Klara Klarowicz. The deal will also see former UK President of BT Global Services and CEO of Alternative Networks, Mark Quartermaine, join as Non-Executive Chairman. Financial details of the investment are undisclosed.
John Carson, Managing Director of Phoenix Datacom, said: “We’re seeing a high demand from organisations wanting to ensure they have cutting edge technology to scale their networks and protect against cyber-threats. With LDC’s support we will be able to maximise this opportunity so that we can build, scale and further enhance our product and service offering. LDC’s experience of backing growing technology businesses gives us greater confidence in delivering our future growth plan.”
Chris Morris, Investment Director at LDC, added: “The team at Phoenix Datacom has a 30-year track record of providing secure data network solutions to a blue-chip client base. This is even more impressive considering how the market’s complex landscape continues to evolve and customers need for the latest capabilities as network performance and security become ever more important. We look forward to partnering with John and the team to support the next stage of their growth journey.”
As part of the transaction, Phoenix Datacom has extended its banking facilities with its longstanding banking provider, Lloyds Bank.
As well as continuing LDC’s strong heritage of supporting fast growing tech businesses, the transaction represents the fourth investment completed in the last 12 months by the South team at LDC. It follows the team’s investments in e-commerce fulfilment specialist James and James, data technology business Aker Systems and digital transformation services provider Foundation SP last year.
Lawrence Dean, Head of LDC in the South, added: “Closing four new investments in our region in the last twelve months underlines our commitment to support management teams leading growing businesses throughout the cycle. As a strategic funding partner, LDC provides business leaders with greater confidence to build scale and resilience during these challenging times.”
LDC was advised by CIL Management Consultants, HMT LLP, Osborne Clarke and Acuity Advisors.
Phoenix Datacom and management were advised by Quantuma, Shoosmiths and Drumore.
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LDC is the private equity arm of Lloyds Banking Group and is authorised and regulated by the Financial Conduct Authority.
LDC has committed to invest £1.2bn in UK mid-market businesses over the next three years.
LDC has a portfolio of 90 businesses across the UK, across a broad range of sectors including Construction & Property, Financial Services, Healthcare, Industrials, Retail & Consumer, TMT, Travel & Leisure and Support Services.
LDC has a nationwide network of regional offices to provide a local presence to the businesses and communities it supports.