LDC backs growth for HR Software Specialist

LDC has backed the management buyout of CIPHR, a leading vendor of human capital management (HCM) software, to further develop its SaaS offering and expand its product range.  

CIPHR, which is headquartered in Marlow, provides HR management software targeted at small and medium sized organisations (SMEs) with between 100 and 5,000 employees. Its cloud-based technology is designed to make human resource functions more efficient, spanning the employee lifecycle from talent attraction, recruitment and on-boarding, absence and core to learning and development, employee rewards and benefits.

The investment will enable the business to further drive sales effectiveness as the business targets significant revenue growth of its SaaS platform.  As part of the investment strategy, LDC said it would also work with the management team to identify potential acquisitions in the HCM software sector. 

CIPHR generated sales of almost £6million in its last financial year, with its SaaS revenue growing by 28% over the previous two years on the back of growing demand for its cloud-based technology.

The business currently services over 300 organisations, including household brands like The White Company, Universal Music, Greggs and the Lawn Tennis Association, along with a number of other public sector and not for profit bodies including the Natural History Museum.

The human capital management software market is estimated to be worth £750m and growing at six per cent per annum*, with the UK’s population of SMEs representing a major opportunity.

LDC has a strong track record of supporting businesses in the technology and software sector, and its current portfolio now comprises 11 firms within the industry which have a combined turnover of more than £200million and support more than 1,400 jobs.

The MBO was led by Chief Executive Officer Chris Berry and Chief Operating Officer Allan Oehlers, with LDC Investment Directors Alastair Weinel and Chris Baker joining the board as Non-Executive Directors. Alastair Hazell has been appointed as Non-Executive Chairman.

Commenting on the deal, Chris Berry said: “LDC’s investment will enable us to accelerate our growth and invest further in the business. Our long term plan remains to increase our SaaS revenues and expand our core offering to provide customers with a total solution for human capital management and become the pre-eminent provider to the UK SME market.

“LDC is an experienced investment partner with a lot of expertise in the SaaS arena. The team quickly understood our model, ambition and strategy for the business. LDC has already introduced us to several of their existing portfolio companies for whom the CIPHR product is ideal.  The partnership will give our management team the extra support needed to accelerate growth and identify strategic acquisitions to build on our product offering for the benefit of our customers.”

Alastair Weinel, Investment Director at LDC, added: “Businesses are increasingly recognising the importance of employee engagement and talent retention, and the need to have effective and measured systems in place to capture and monitor progress. With the additional backing of LDC, CIPHR now has an exciting opportunity to accelerate the growth of its SaaS platform and revenues, as it looks to consolidate its position as a market-leading provider.

“This investment demonstrates LDC’s commitment to supporting the growth of ambitious UK-based companies, using our funding and balance sheet strength, and strategic expertise to create scale and support.”

* R Technology & Service Delivery Trends in 2014 (US), ISG 2014

Notes to Editors

  1. LDC is the private equity arm of Lloyds Banking Group and is authorised and regulated by the Financial Conduct Authority.  
  2. LDC backs ambitious management teams from UK-based medium sized companies seeking up to £100m of investment to fund management buyouts or development capital transactions.
  3. LDC invests in a broad range of sectors and has particular experience in Healthcare, Industrials, Retail & Consumer, TMT, Travel & Leisure, Support Services, Construction & Property and Financial Services.
  4. LDC has a UK regional network with locations in Aberdeen, Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Newcastle, London, Manchester, Nottingham and Reading.