Equity firm takes majority stake in £38million tech company
Palatine Private Equity has acquired a majority stake in Manchester-based FourNet.
The financial details haven’t been revealed, but FourNet has annual revenues of £38m, employing more than 100 staff across its offices in Trafford Park, London and Burton-on-Trent.
“Our new partnership with Palatine further positions us as a prime player in the technology sector and we are delighted to be working with their team,” stated FourNet CEO Richard Pennington.
“The pandemic has been a catalyst for significant change in working practices and our industry over the past 12 months and fresh investment will enable FourNet to rapidly meet the changing needs of our customers, many of whom are critical to the UK’s success following the pandemic, and to build and acquire the additional capabilities that our customers require.
“Palatine’s investment will keep FourNet at the forefront of the industry and will also provide the fuel for us to lead further change across the sector, while allowing us to capitalise on the rapid growth in demand for cloud, collaboration and managed service solutions.
The move will mean the exit of current backer, YFM Equity Partners, which said that it had a achieved a 6x return since its original investment 4 years ago.
“Four years ago, we backed FourNet as a niche business with a strong reputation in a specialist and rapidly growing market, knowing that, with our support, they could continue to thrive. They are exactly the type of business and management team that YFM looks to invest in from our managed funds,” explained Dan Freed, partner at YFM.
“Over that time, we have worked closely with the management team to pull together a longer-term plan of how to scale people and processes as they expand. FourNet has delivered strong increases in revenue and profits and been at the forefront of technology change in the market, delivering complex solutions to its impressive customer base.”
FourNet co-founders Frank Jennings (Operations Director) and Mike Jervis (Chief Technology Officer) will also leave the business.
Iain McKenzie, who has been Chairman of FourNet since the YFM investment, is remaining in position.
“FourNet is a highly respected, well-managed business with a loyal customer base and we look forward to working with Richard and the leadership team to add further value and power its continued growth at a time of significant public sector investment in Cloud and IT infrastructure,” added Andy Strickland, Senior Investment Director at Palatine.
“We see significant opportunity for FourNet to strengthen its position in the market place as the go-to cloud services supplier to the public sector. Given our strong track record in the TMT sector and in IT, cloud and managed services in particular we believe we will be able to assist management in capitalising on the market opportunity.
“As part of the strategy we will look at selected buy and build opportunities, but we also see great potential for organic growth. We also see a major opportunity to work with management to further develop the company’s already strong ESG credentials, an area where there is ever-increasing awareness and significance during the public sector procurement process. ESG is an integral part of the value-add proposition Palatine brings to the businesses it invests in.”
FourNet’s clients include 10 Downing Street, the Cabinet Office, HM Treasury and the Bank of England.