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insider dealing

It’s good to talk

Author: Jason Sinclair

Published: 06 Dec 2023

yellow plastic cups string between telephone talk blue background

In a fast-moving tech world, business messaging expert Commify has adapted, acquired and stayed the distance. Now ECI, which had shown interest in the business for many years, has invested some of its £1bn new fund to help take it to the next level. Jason Sinclair reports.

Do you remember text messages? Commify does. And its service – providing mobile communications services for companies to their customers and staff – has grown over two decades, despite SMS being joined by email, WhatsApp, Telegram and a plethora of other messaging apps.

Encompassing mergers, multiple acquisitions, a management buy-out and rounds of private equity ownership, the company’s story is one of agility and adaptation in a changing, growing field. The latest chapter for the Nottingham-based firm is a €300m deal that saw ownership switch from Hg to ECI Partners, in a secondary buy-out completed in September. But with the company seeking more acquisitions and geographic spread under its new ownership, that deal may be merely the end of the prologue, with much more of the story to come.

Master strategy

Key to the narrative is Paul Burton. As Commify’s chief strategy officer he has been responsible for the company’s long-term strategy and growth, including an acquisition strategy that has seen 16 purchases in the past decade. Working for Darwin Private Equity in 2013, Burton was part of the team that backed the management buy-out from its founders of what was then called Esendex (still the name of one of Commify’s largest brands). 

Jumping from the private equity world, he joined Commify full time in 2015. Burton has since used his knowledge of M&A, gained in investment banking and private equity, to inform their acquisition decisions in-house.

“We are now entering our third round of private equity ownership,” Burton says. At the start of this journey, the business made €10m revenue and €1m EBITDA. The company made 16 acquisitions over 10 years, alongside organic growth that grew the business to €150m revenue and €25m EBITDA. “It’s been a great private equity success story of driving a long-term buy-and-build alongside an organic growth play in an evolving and growing market,” he says. “I’ve been an architect of this, from starting as a private equity investor to leading the M&A in-house.”

Good timing

In this position, Burton knew the sort of attractions that Commify would have for investors during the sale process, and which of those investors would suit their business, and he remembered ECI having made “a very good account of themselves” while building a relationship in the previous investment round of 2017 – which ECI ultimately didn’t pursue.

“They always stayed in touch,” he says. When Commify launched a sale process in 2022, market challenges arising from the Truss/Kwarteng budget meant the process was aborted, says Burton. At that point, ECI also didn’t have a fund large enough to make the relevant investment in Commify. By the time Commify re-engaged in sale conversations in more clement waters, ECI had announced a new £1bn fund and got in touch, says Burton, to say that “maybe Commify was now big enough to do something here”.

He remembers: “There was complete alignment between both parties and the timing was excellent. We were speaking to other parties, but it became clear early on that ECI had the most conviction and they understood our business. They knew our business from years gone by and they’ve also invested in other telecoms and software crossover businesses that have similar dynamics to ours. We were able to explore a deal pretty quickly.”

Working on the ECI side of the deal, investment director Faye Maughan says: “ECI had stayed in touch with the management team since the Hg investment in 2016. This March, we reached out to find out if Hg might be open to having a conversation. That discussion led to us brokering an off-market deal and we completed due diligence over the summer and closed in August.”

The biggest opportunity going forward, Maughan says, is in buy-and-build, “looking to continue the strategy Commify had under Hg, but hopefully with larger deals in Europe and the US”.

Acquisition strategy

For Commify, the ECI funding for further acquisitions will represent a continuation of its proven inorganic strategy. “There are three legs to this strategy,” explains Burton. “The first is to expand market share in our existing countries – anything that adds high-quality customers and teams to our established market position is a good thing. Then, the most exciting part of our M&A strategy is entering new markets. Two of our most exciting recent acquisitions were Spryng, which took us into the Benelux market, and CDYNE, which brought us into the very large US market. We’ll be doing more of that in the coming years, but the third pillar is using M&A to expand our product offering. We’ve done less of that in recent years, but it’s a really interesting opportunity.” 

Commify’s CEO, Richard Hanscott, echoes this, saying: “ECI’s ownership will allow us to accelerate our investment in new products and services, including our growing range of messaging channels such as WhatsApp. Alongside this we are excited to continue to drive expansion through further acquisitions in both existing and new countries. Commify is perfectly positioned to continue to deliver high-quality, sustainable growth, supported by ECI’s significant investment.”


The £300m buy-out of Commify by ECI Partners from Hg Capital was completed in September 2023. It was a full realisation for Hg, and it was the first investment for ECI from its 12th and largest fund, ECI 12 – at £1bn.

ECI received corporate finance advice from Houlihan Lokey and legal advice from Squire Patton Boggs. 

Commify’s corporate finance advice came from Moelis & Company and Liberty Corporate Finance, with Baker Botts and Linklaters providing legal advice.

Burton adds: “The great thing with the ECI backing is that we have continuation and alignment of strategy. First, we have the financing firepower to do what we need over a five-year period. Second, of all the investors we spoke with, ECI was the least prescriptive. It was refreshing how much it tried to understand what we as management thought was best for our business.”

More to come

The plan is for a similar pattern of acquisitions to the previous ownership period – two or three per year – with McCreadie joining the board, and Maughan attending in a non-executive capacity. McCreadie points to Commify’s “differentiated position in a global market, with messaging becoming the number one customer engagement channel” meaning a “compelling growth opportunity”. A company formed in 2001 in the infancy of business-to-consumer SMS is, with 45,000 customers and 300 employees, still getting the message out that it’s ready for growth.

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