Zeus Private Equity funds second MBO in as many weeks

Zeus Private Equity (ZPE) has completed its second deal in as many weeks, backing the management buyout of leading telecommunications solutions provider, XLN Telecom Limited.

Based in Vauxhall, London, and employing 90 people, XLN supplies fixed line and broadband services to 70,000 customers in the SME sector. Formed in 2002 following deregulation of the UK telecoms sector, the company is one of Britain’s fastest growing alternative telecoms service providers to the SME sector.

XLN was co-founded by former Ernst & Young Entrepreneur of the Year, Christian Nellemann and Anthony Karibian This transaction allows Christian and Anthony to buy out several minority shareholders who helped fund the business when it was originally founded. A Chairman will be appointed and both Gary Tipper and Tony Dickin are also joining the Board. ZPE has invested £6.63 million to acquire a majority stake in the business. Kaupthing Singer & Friedlander have provided senior debt and working capital facilities. The investment will allow the management team to continue the company’s impressive organic growth and will also allow them to grow the business by acquisition.

Partner at ZPE, Tony Dickin, commented on the deal: "XLN is a highly profitable business with a scalable business model and strong market opportunity. The management team is extremely impressive and runs a very tight, customer-focused ship. With the ongoing shift to mobile and broadband usage set to continue, XLN has significant opportunities for growth. The sector is also highly fragmented and the plan is to grow the business both organically and via a highly selective acquisition strategy." ZPE was advised on the deal by Deloitte in Manchester and London who carried out a combined financial, commercial and project management role. Richard Bell and Jodi Birkett led the financial due diligence with Sam Baker leading the commercial due diligence team. Ian Barton and James Oliver led the project management team. ZPE were also advised by Rebecca Grisewood, Mark Dawson and Alex Laver from Halliwells.

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