Mid-market private equity firm Bowmark Capital has backed the GBP32 million management buy-out of CSL DualCom (CSL) – the UK’s largest provider of dual-signalling products and services for intruder alarms – from Octopus.
CSL pioneered dual-signalling technology, whereby signals are transmitted over both a traditional fixed telephone line and a wireless network, in the late 1990s. This is now regarded as the standard format for alarm signalling and is specified by all leading insurance companies.
The company has grown rapidly over the past five years. Today, CSL manages the signalling for over 125,000 intruder alarms located in commercial, retail and residential premises across the UK. These are connected to alarm receiving centres via its proprietary communications network, which it has developed in partnership with Vodafone.
The management team is led by CSL’s managing director, Phil Hollett, who has over 25 years’ experience in the security industry, and Simon Banks, commercial director, who co-founded the business in 1996.
Bowmark Capital provided GBP13 million of equity to finance the transaction, acquiring a majority interest in the company. Octopus extended its debt facilities to £10 million, thereby further supporting CSL’s future growth, having crystallised its equity investment through the sale.
Bowmark’s experience of supporting high-growth companies, coupled with its relationship with CSL’s management team – having tracked the business for the previous two years – were key to the success of the transaction.
Phil Hollett, CSL’s managing director, says: “We are delighted to have completed this transaction with our new financial partner, Bowmark Capital. CSL is uniquely positioned to capitalise on the significant opportunities in the security communications market. With Bowmark’s support, we will continue to pursue strong growth in existing and new markets, by applying our UK security industry expertise both overseas and in adjacent sectors. We’d like to thank Octopus for their involvement and hard work – but the relationship doesn’t end here as Octopus continues to support CSL through debt financing. We look forward to continuing the growth story for many years to come.”
Bowmark investment director, Paraag Davé (pictured), says: “CSL has an outstanding reputation based on its strong product suite and excellent customer service. We are delighted to be backing such an experienced team in the next phase of development of the business.”
Jane Vinson, portfolio director with the Octopus Ventures team, says: “Octopus is really pleased by the progress that CSL has made since we partnered with the management team in 2006. By providing debt facilities to the MBO, we can continue to support the business as it looks to grow significantly in the future. This is a great example of how strong relationships between investors and talented entrepreneurs, and flexible funding structures can really help small businesses at various stages of their growth trajectory.”
Baker Tilly’s M&A and Private Equity team facilitated the transaction for Octopus.
