Clearwater International has advised ECI Partners (“ECI”), the UK mid-market private equity firm, on its investment in Fourth Hospitality (“Fourth”), the UK market leading SaaS (software as a service) provider of back-office systems to the hospitality sector. The funding from ECI will be used to accelerate geographic growth, increase market penetration; finance new product development and fund new bolt-on acquisitions.
Fourth was founded in 1999 by serial restaurant entrepreneurs Derek and Edwina Lilley, who remain investors in the business. Since then, it has grown rapidly to become the UK market leader with a 12% share of the market, and last year appeared in the Sunday Times Tech Track of fastest-growing companies. Fourth operates across twenty countries, including the US, Russia, Germany and South Africa, managing over 150,000 employee records and processing more than 3 million invoices.
The company has a strong track record in providing the market-leading software for labour, stock and purchasing functions, generating material cost synergies (up to 7%) for its customers. During its 12-year history, the company has never lost a customer to a competitor. Customers include Pizza Express, Fuller’s, Marston’s, Wagamama, Café Rouge, Hilton, Jamie’s Italian, Carluccios, the Gordon Ramsay Group and ASK. Revenues in the year to 31 August 2010 rose by 17%, with EBITDA up 29%. The company has 167 full time employees.