Mid-market private equity firm ECI Partners has sold portfolio company XLN Business Services to XLN’s management team, financed by vehicles managed or advised by GSO Capital Partners.
XLN was the first investment from ECI’s Fund 9 in September 2010 and this exit has yielded ECI a 3x return on its investment.
During ECI’s period of investment XLN made two bolt-on acquisitions: acquiring Card Processing Solutions (to provide a credit and debit card processing service to its customer base) and Shine Telecom (a smaller provider of fixed line telecoms to small businesses).
Frank McKay, former CEO of Travis Perkins and Brakes, has been appointed as the new chairman of XLN, taking over from the outgoing chairman John Donaldson, who will remain on the board as a non-executive director.
Founded in 2002 by its current CEO Christian Nellemann, XLN is an independent provider of fixed line, broadband, energy and bank card processing services to small businesses across the UK with a particular focus on micro SMEs with between one and 10 employees.
Tom Wrenn, partner and head of ECI’s TMT team, says: “It has been a pleasure partnering with an entrepreneur of the calibre of Christian over the past four years and working with him to build a management team capable of delivering his vision for XLN. Since 2010, the business has achieved a huge amount and this deal adds to our strong track record in backing high growth businesses serving the small business market.
“We wish Christian and XLN every success with their new partner as they continue to offer great value and service to small businesses across the UK.”
Nellemann says: “I would like to thank Tom and his team at ECI for the significant value that they added to help XLN become the leading supplier of services to small businesses.
“The backing of GSO, a blue chip investor, is a strong endorsement of our entrepreneurial approach, our high quality management team and the opportunities for acquisitive and organic growth that we have.
“I look forward to widening our crusade to help more of Britain’s Heroes of the Economy, the micro SMEs, get a better deal on business services and receive the world class customer service that they deserve.”
The acquisition vehicle was advised by Catalyst Corporate Finance.
