How we've helped our clients: Babble
Babble is an industry-leading communications technology supplier. Based in the UK, Babble provides unified technology solutions for more than 2,000 small and mid-sized businesses. The company’s services include hosted telephony (VOIP), communications, cloud contact centres, mobile and enterprise connectivity.
Babble has embarked on an ambitious targeted buy-and-build programme since first partnering with mid-market private equity investor LDC in 2017. This strategy has helped the business to expand its product portfolio, extend its geographic footprint across the country and consolidate its position in the UK’s unified communication market. Babble’s success has also been underpinned by organic growth. The launch of its contact centre proposition and performance of its communications offering has helped the firm grow fixed revenue.
Babble carried on their acquisitive streak throughout 2020.
How did Babble expand in 2020 and how did we help?
In January 2020 we advised Babble on the acquisition of Leeds-based Diva Telecom Limited from the two individual selling shareholders, with the acquisition being entirely debt funded by AIB. Diva Telecom is an award-winning telecoms business, founded in 2006, with a global customer base of over 1,000 companies. This acquisition by Babble almost doubled its customer base and further strengthened its core capabilities.
In June 2020 Babble acquired Lancashire-based telecoms company Lake Technologies Ltd. The transaction was funded by LDC. Lake Technologies was founded over 26 years ago to provide business telephony and network services.
August 2020 saw Babble acquire Corporate Management Telecom Ltd (CMT) in another transaction backed by LDC. Based in Essex, CMT has been providing information technology services and solutions since 1998 and offers business telephony and cloud-based services (including voice, system hardware, IT and mobile) to over 500 customers.
In October 2020, Babble acquired Shape Networks Limited. Based in London and with a presence in Manchester, communications company Shape Networks provides fixed-line voice, mobile, data and managed services to its customers.
November 2020 saw LDC partially exit Babble, in a transaction valuing the business at £90m. We advised the selling shareholders of Babble Cloud Holdings Limited on its secondary buy-out by private equity investors Graphite Capital. The deal sees LDC retain a minority stake alongside Graphite Capital and Babble’s management team, led by CEO Matt Parker. During its three-year partnership, LDC provided nearly £9m of follow-on funding to support six acquisitions. In that time, the firm increased turnover by 230% and headcount by 200%. The further investment by Graphite Capital will provide additional growth opportunities for the firm.
Following swiftly on from the Graphite Capital investment in Babble, the business was back on the acquisition trail in December 2020, when they acquired Ultra Communications Limited (Ultracomms) and its subsidiaries. Established in 2004, Portsmouth-based Ultracomms provides cloud-based contact centre technology to a diverse client base.
Looking back on our relationship with Babble
Babble’s growth story has been impressive, and their journey in 2020 further expanded its business proposition. The future looks exciting for these self-described “technology partners to the ambitious” – there are even more acquisitions in the pipeline, as they pursue their £100m revenue target.
Corporate partner Andrew Peddie said: “Both Babble and LDC are long-standing Gateley clients. We were delighted to help them through a busy year of deal-making and to facilitate the next stage of Babble’s exciting journey. Graphite Capital’s new investment will enable the company to expand its client base and diversify its services, and LDC retaining a minority stake in the business will also allow it to contribute further to Babble’s continued progression and development, as it has done since 2017.”
CEO at Babble, Matt Parker, said: “We have worked with Gateley since shortly after LDC first invested in late 2017 and they have become a really important professional advisor relationship for us. We quickly came to trust their legal support in our acquisition programme, and the same was true in the preparation for and execution of the investment by Graphite. I cannot fault their work ethic and expertise and we look forward to working with them as we continue to carry out further acquisitions now and in the future.”
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