Souter Investments completes acquisition of Stone Group

Souter Investments has completed the acquisition of a majority stake in Stone Group, an ICT services provider, in an equity and debt refinancing of the business led by CEO Simon Harbridge and the existing management team.

Founded in 1991, Stone Group has assisted thousands of organisations in adapting and thriving in a continually changing technology landscape by deploying valuable technology, delivering personalised services and providing reliable IT support.
 
The deal sees private equity investor RJD Partners (RJD) realise its investment which was acquired via a management buy-out of Stone Group in 2008. Certain of RJD’s investors will retain an interest in Stone Group having invested alongside Souter Investments in the new structure.
 
Harbridge says: “I am privileged to lead a fantastic team at Stone Group. We continue to grow strongly, adding net new customers in each of our vertical markets, while also developing our infrastructure and cloud solutions and services.  Our own hardware offerings remain the technology of choice for customers in several sectors. In addition, our fast-developing secure IT asset recycling and disposal services, accredited by the Environment Agency, assist our customers in achieving GDPR compliance and reaching their environmental and sustainability goals, whilst also providing peace of mind that their data bearing equipment is being disposed of safely.

“This transaction represents an important and significant milestone for Stone Group. RJD has been a highly supportive partner for over ten years, during which the business has grown and matured. I am delighted that David MacLellan, chairman and founder of RJD, is continuing his involvement with us, investing alongside Souter and becoming our Non-Executive Chairman. Souter share our vision for the Group and will be a strong and dynamic supporter for the next stage of our journey.”
 
John Berthinussen, Investment Director at Souter Investments, says: “Stone Group presents an exciting opportunity for Souter Investments to back an experienced and successful management team, leading an established and significant technology business highly regarded in a fast-moving sector.  We look forward to working with Simon and his team as they continue to drive organic growth and expand the mix of Stone Group’s technology, service and support offerings, with the opportunity for both to be accelerated by M&A and strategic partnerships.”

Shawbrook, the specialist UK lending and savings bank with a focus on SMEs, provided debt facilities for the transaction.
 
Dickson Minto acted as legal advisers for Souter Investments, Freeths for management, Osborne Clark for RJD and Squire Patton Boggs for Shawbrook. BDO, Customer Satisfaction UK, Neotas, FWB Park Brown and Marsh provided due diligence services. Cadence Advisory provided debt advisory services.
 
Following a series of company sales in 2019, Souter’s investment in Stone Group follows its support of Coretrax Technology’s acquisitions of Churchill Drilling Tools and Mohawk Energy as part of a syndicate led by Buckthorn Partners. During the year, Souter has also completed a new investment in Eaton Gate, a managing general agent in the insurance sector, and DivideBuy, another Souter portfolio company, has been ranked third in the 2019 Deloitte UK Technology Fast 50 – one of the UK’s most foremost technology awards, celebrating the fastest growing technology companies in the UK.