Independent private equity house, Zeus Private Equity (“Zeus”), has exited its investment in telecommunications provider, XLN Telecom (“XLN”).
ECI Partners has backed the management team in a secondary buyout of XLN for an undisclosed consideration. The deal has delivered a multiple of investment of 4.5x for Zeus. A number of unsolicited approaches generated sufficient interest for Zeus and the management team to consider the sale, following three years of significant profit growth.
Based in Vauxhall, XLN was founded in 2002 by Christian Nellemann, following the deregulation of the UK telecoms sector. The company supplies fixed line, mobile and broadband services to more than 115,000 customers in the SME sector and is the UK’s largest independent telecommunications provider. As a result of the transaction, XLN will now have funds available to more than double the size of the business through acquisitions.
Zeus originally backed the management buy-out of XLN in January 2008, investing £6.63 million to acquire a minority stake in the business. In March 2009, Zeus went on to support XLN’s acquisition of competitor, OneBill Telecom, with additional investment of £2 million. The firm now employs 180 staff at its head office and recorded a turnover of £54 million in the year to March 2010, revenues having grown substantially from £27 million in 2007.