Foresight helps management see the big picture

A Derby-based technology firm has been bought by a buy-in management buy-out team in a £12 million deal.

A Derby-based technology firm has been bought by a buy-in management buy-out team in a £12 million deal.

A Derby-based technology firm has been bought by a buy-in management buy-out team in a £12 million deal.

Datapath, a supplier of the technology behind large screen displays, has been bought in a deal backed by Foresight Group, with debt provided by Royal Bank of Scotland (RBS).

Private equity investor Foresight injected £3 million of equity into the deal as well as introducing buy-in candidate Simon Hunt to the business as chairman.

The deal was instigated by Datapath’s founders, Steve De’Ath and Tony Jones, who were looking for funding to move the business forward. The duo has sold some of their equity through the deal, but retain key roles at the company.

The transaction was originated and project managed by Cooper Parry, led by assistant director Sally Saunders and partner Roy Farmer.

Saunders worked with De’Ath and Jones for more than two years to identify a financial partner that would allow them to realise the value of the business whilst retaining a shareholding. “The transaction will allow the business to capitalise on the significant opportunities for further growth,” Saunders said.

Foresight was advised by law firm Martineau Johnson, with Datapath supported by Cooper Parry LLP and Browne Jacobson. RBS was represented by Flint Bishop.

Martineau Johnson’s team was led by corporate law partner Kavita Patel, who said: “The private equity industry has had a tough time in terms of the headlines of late.

“However, the investment in Datapath shows that leading players like Foresight are still acting as a real catalyst for deals and future business growth in the small to medium-sized deals market.”

Foresight and RBS approached Tenon Corporate Finance to manage a financial due diligence review of Datapath’s operations.

Tenon’s Nottingham-based transaction services team was led by director Julian Clough, who was supported by senior manager Sarbjit Bitter.

Clough said the transaction made commercial sense. “It provided an opportunity for the vendors to realise some of their investment, whilst still retaining a majority share in the business.

“The business has developed a strong niche position through its diverse product range and strength of customer relationships and technical support provided,” he added. “The transaction recognises the potential of the business and provides a financial and strategic platform to support the business through the next phase of growth and into a wider geographical marketplace.”

Datapath, which has sales approaching £10 million and 27 employees, boasts an annual growth rate of more than 30 per cent.

Marc Barber

Raven Connelly

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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