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High tech acquisitions

Six acquisitions in three years proved part of a successful growth strategy for LDC-backed communications provider Babble. In November 2020, a controlling stake was sold to Graphite Capital, valuing the communications business at £90m. Alice Murray finds out about a deal during lockdown, and where the high-tech company is going next.

Corporate Financier article image - March 2021 editionIn November 2020, mid-market private equity firm LDC partially exited its investment in the self-styled ‘unified communications provider’ Babble to financial buyer Graphite Capital, in 
a deal that valued the business at £90m. The communications and cyber security company provides hosted telephony, communications, cloud contact centres, mobile and enterprise connectivity to around 2,000 clients, which are largely UK-based SMEs.

Back in 2017, LDC backed a management buy-out of Babble by making a £4.6m investment for a majority stake in the business. Over the intervening three-year period, LDC supported Babble’s growth plans with a further £9m of investment. Turnover increased by 230%, and headcount doubled. Increased revenue came from a combination of organic growth and acquisitions. In 2018, Babble acquired Direct Response and then Birmingham-based Arden Group, in a deal that doubled its revenues to almost £20m and customers to 1,200. The following year was spent consolidating and integrating the acquisition. Then in 2020, it made four acquisitions: Leeds-based Diva Telecom in January; Lake Technologies in July; Corporate Management Telecom (CMT) in August; and, just before the business was sold in November, Shape Networks.