ECI delivers a 3x return on the exit of XLN Business Services

XLN BizHub
  • 2 min read

London, 6th October 2014: ECI Partners, the growth-focused mid-market private equity firm, has sold portfolio company XLN Business Services ("XLN") to XLN's management team financed by vehicles manage...


**London, 6th October 2014: **ECI Partners, the growth-focused mid-market private equity firm, has sold portfolio company XLN Business Services ("XLN") to XLN's management team financed by vehicles managed or advised by GSO Capital Partners LP ("GSO"), a division of the Blackstone Group L.P. ("Blackstone"). XLN was the first investment from ECI's Fund 9 in September 2010 and this exit has yielded ECI a 3x return on its investment.

During ECI's period of investment XLN made two bolt-on acquisitions: acquiring Card Processing Solutions (to provide a credit and debit card processing service to its customer base) and Shine Telecom (a smaller provider of fixed line telecoms to small businesses). Former CEO of Travis Perkins and of Brakes, Frank McKay has been appointed as the new chairman of XLN, taking over from the out-going chairman John Donaldson, who will remain on the board as a non-executive director.

Founded in 2002 by its current CEO, Christian Nellemann, XLN is the leading independent provider of fixed line, broadband, energy and bank card processing services to small businesses across the UK with a particular focus on micro SMEs with between one and 10 employees.

XLN's entrepreneurial approach has earned it numerous awards at national level including Christian Nellemann becoming the UK's only serial entrepreneur to win the Ernst & Young Entrepreneur of the Year award, twice.

Tom Wrenn, Partner and head of ECI's TMT team said: "It has been a pleasure partnering with an entrepreneur of the calibre of Christian over the past four years and working with him to build a management team capable of delivering his vision for XLN. Since 2010, the business has achieved a huge amount and this deal adds to our strong track record in backing high growth businesses serving the small business market. "We wish Christian and XLN every success with their new partner as they continue to offer great value and service to small businesses across the UK."

Christian Nellemann, founder and CEO of XLN said: "I would like to thank Tom and his team at ECI for the significant value that they added to help XLN become the leading supplier of services to small businesses. The backing of GSO, a blue chip investor, is a strong endorsement of our entrepreneurial approach, our high quality management team and the opportunities for acquisitive and organic growth that we have. I look forward to widening our crusade to help more of Britain's Heroes of the Economy, the micro SMEs, get a better deal on business services and receive the world class customer service that they deserve."

Frank McKay, new chairman of XLN said: "I am delighted to be joining such an exciting and fast moving company and supporting Christian and his team in taking XLN to the next level."

John Donaldson, out-going chairman of XLN said: "ECI has been very supportive over past four years of investment in building a strong management team throughout the business product diversification process with the acquisition of CPS and focus on improving customer service and customer retention.

"Christian has continued to lead the business with entrepreneurial flair and passion. The business is well placed for the next stage of its development partnered by GSO who no doubt will be supportive of continued growth in XLN's core business as well as further product diversification." The acquisition vehicle was advised by Catalyst Corporate Finance.