LDC has backed the management buyout of Hull-based Giacom World Networks (“Giacom”), the fast-growing cloud IT and communications solutions provider, for an undisclosed sum.
The business has experienced very rapid growth over the last three years as micro SMEs have taken advantage of the ongoing trend to move their software and IT solutions from on-premise to the cloud, to realise efficiency and cost savings. The transaction will enable the business to accelerate its growth through increased investment in its proprietary platform, the integration of additional cloud products and to expand its service provider network.
Founded by Nick Marshall in 1999, Giacom has created a strong, niche position to target the micro SME market, which has traditionally been an uneconomic market to serve. The business currently supports a network of more than 3,500 IT consultants, service providers and resellers via its proprietary MessageStream platform.
The platform is specifically designed for this market and offers a range of key outsourced services, including live on-boarding, web-based access, “easy on, easy off” licensing, billing and technical support. It is also one of the UK’s largest channel-based cloud solutions marketplaces and the network uses the platform to supply more than 17,000 micro SMEs with products ranging from email and document storage solutions to encryption and anti-virus software, serving more than 100,000 “seats” nationwide.
Giacom is one of only eight Microsoft 2-Tier/indirect Cloud Solution Provider (“CSP”) partners in the UK. It is able to offer Microsoft SaaS and IaaS products such as Office 365 and Azure to service providers. Since being awarded the status in 2015, the business has grown to become the number one CSP partner in the UK, based on the volume of seats, recently winning “Best New Partner” at the worldwide Microsoft Cloud Summit.
With LDC’s investment, Giacom said it planned to consolidate its leadership position in the UK Microsoft CSP market and expand its MessageStream platform with the addition of new, complementary software products for its micro SME end-user market, as demand for cloud-based solutions expands.
As part of the transaction, the management team – which will continue to be led by Mr Marshall as CEO – will remain majority shareholders, with LDC acquiring a significant minority stake.
The transaction was led from LDC’s Manchester office by LDC Investment Director Simon Braham and Director Jonathan Bell, and Mr Braham joins the board.
Commenting on the deal, Nick Marshall, CEO, said: “Despite operating in a highly-competitive and fast-paced industry, we’ve always had our eye on the underserved IT consultants and micro SME end-users and it’s this constant focus that has helped Giacom evolve rapidly from its roots.
“By ensuring IT consultants can offer the complete package via one intuitive platform we’re helping many organisations streamline their operations and save costs in the process. We now operate one of Europe’s fastest growing cloud marketplaces, but there is so much scope for further growth.
“Bringing LDC on board will help us deliver our next phase of growth. As well as giving the business access to the capital we need to scale, LDC is a partner who understands not only our sector, but also our vision and ambition for the future. This is an exciting time for our customers, our network of consultants and our people.”
Simon Braham, Investment Director at LDC, added: “Giacom has a highly capable leadership team, a unique proposition to the market and a proven ability to innovate at pace. As a result, the business has posted impressive revenue and profit growth of more than 50 per cent per annum in recent years, despite operating in a highly competitive market.
“More than 99 per cent of UK businesses are small and medium sized, with an increasing number accessing software solutions via the cloud. With further investment, Giacom has a strong opportunity to consolidate its position in the market, enhancing the service it provides to its network of IT consultants and subsequently becoming the go-to software provider for businesses at this end of the market.
“We’re looking forward to working closely with Nick and the management team to help build the business further, developing relationships with new software vendors to expand the current product portfolio and increasing the size of the network as more and more IT consultants realise the benefits of utilising the MessageStream platform.”
LDC was advised by KPMG Corporate Finance (Alex Hartley, Nisha Sharma and Graham Pearce), Gateley plc (Paul Jefferson and Stephen Roberts), DSW Transaction Services (Ed Brentnall and Catriona Lang), EY (Olivier Wolf) and KPMG Tax (Steve Heath), while Giacom was advised by KBS Corporate (Tony Ford, Stuart Lees and David Gardner) and TLT LLP (Ian Roberts and Stephen Devlin).