Mitrefinch secures £20m plus investment from LDC in global growth drive

Mitrefinch, one of the UK’s leading developers of human capital management (HCM) software, has secured an equity investment of more than £20m from LDC to support its international expansion.

The investment, part of a management buyout led by CEO Debbie Guppy, will see LDC become a significant shareholder in the company, alongside additional members of the management team.

Mitrefinch, which is headquartered in York, provides an integrated suite of HCM software spanning time and attendance, rostering, HR and payroll. Its products are helping more than 3,500 organisations to reduce cost whilst improving efficiency and compliance.

Customers include small and medium sized firms (SMEs), mid and large corporates, public bodies, charities and universities, with brands such as L’Oreal, Nestle, Amec Foster Wheeler, DFS, the Forestry Commission and the University of Leicester.

Human capital management software is a $1.8bn global market that is estimated to be growing at more than 10% per annum. Mitrefinch’s revenues have grown 50% over the last three years from £10m to £15m.

Following LDC’s investment, the firm plans to expand its nascent overseas business in Canada, the US and Australia, as well as developing new and existing relationships in its more established UK business.

It also plans to commit significant investment to new product development to continue expanding and improving its suite of products, including its software as a service (SaaS) offering and its rostering product suite.

Debbie Guppy, CEO of Mitrefinch, said: “This is an important step for the business and an exciting time for our people and customers. From the outset, LDC saw the potential in the business and bought into our vision as a management team. Their approach, track record and sector expertise gave us the confidence they were the right long-term investment partner to help us deliver our ambition for the business - to be the leading provider of integrated, SaaS-based human capital management software in the market with a growing and global customer base.

Richard Ibbett, Investment Director at LDC, said: “Debbie and the team have built an enviable market position for Mitrefinch, with a high-performing suite of integrated products and a loyal, fast-growing customer base. With significant additional capital to invest in the business, a high quality team and a clear growth strategy, it has a real opportunity to achieve a dominant position in a growing, consolidating and globalising marketplace.”

The deal is the third so far this year for LDC’s Manchester office, following investments in business services firm Ellis Whittam and Cloud-based IT and communications group Giacom. Earlier this year it announced plans to invest £100m locally during 2016. The firm, which recently moved to larger offices on King Street, has also successfully exited investments in contract catering firm Waterfall and Synexus, one of the world’s largest clinical trials patient recruitment firms.

Jonathan Bell, Director and Co-Head of LDC in Manchester, added: “Backing Mitrefinch is another signal of our appetite to invest from the regions to support ambitious UK businesses and their management teams. There are dozens more firms across the region with that same potential to scale, and it’s important management teams know there are experienced partners like LDC who stand ready to support them.”

Both Richard and Jonathan will join the board as Non-Executive Directors.

The business was advised by GCA Altium’s Manchester office in a process led by Adrian Reed, Dom Orsini and Jon Stead, with legal support from Squire Patton Boggs (Steven Glover).

LDC was advised on its investment by KPMG (Jonathan Boyers, Alex Hartley, Graham Pearce, and Nick Dodd from KPMG’s Deal Advisory practice), DLA (James Kerrigan and Chris Wilson) in Manchester and Harris Williams.

Debt facilities were provided by Silicon Valley Bank (Emma Stephens and Darren Davidson). 

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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.