Reseller group 2e2 Group has announced 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. 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 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.