Relevant Document:FY’22 Financial Report
Direct lenders have submitted unitranche pitches at 5x leverage to support the potential buyout of U.K. cloud solutions FluidOne Ltd., sources told Reorg. Clearwater International is running the debt process, which has launched ahead of the M&A.
A debt package of more than £70 million is being outlined alongside an ACF to fund the company’s roll-up strategy. The company is being marketed off EBITDA of about £15 million and Raymond James is the M&A advisor, as
reported.
Other cloud and IT services providers have recently commanded leverage levels of more than 5x, including Dutch IT services
hallo, but some lenders have been considering how much of a focus FluidOne has on mobile and telecoms services as opposed to the more cash-generative managed services and IT sectors.
FluidOne reported a revenue increase of 24.1% year over year to £41.7 million for the year ended March 31, 2022. Underlying EBITDA was down 16.5% year over year to £4.2 million, reflecting an erosion of margins to 11.2% from 14.9%.
During the 2022 financial year, FluidOne
acquired connected cloud company SAS. A restructuring of the group was undertaken in the first quarter of fiscal 2023, which resulted in a new organizational structure, combining the FluidOne and SAS teams. The company said that, as a result, it expects to see an increase in EBITDA margins in fiscal 2023.
The company’s run-rate revenue was £57 million and run-rate underlying EBITDA was £7 million as of March 2022, according to its accounts. This is before the planned synergies from integrating SAS into FluidOne and before the acquisition of U.K.-based Marathon Managed Services Holdings Group Ltd. for £15 million in May 2022.
At the time of the acquisition of Marathon, the group conducted a refinancing of its existing debt with its incumbent provider HSBC. The refinancing comprised a £52.5 million loan, a £15 million committed acquisition facility and a £2 million super senior RCF. The facility has been made available for 4.5 years, with four years available on the super senior RCF.
U.K.-based private equity firm Livingbridge acquired FluidOne in 2019, according to a
statement at the time.
FluidOne was founded in 2006 by CEO Russell Horton and co-founder Chris Rogers. The company provides a range of connectivity services to U.K. businesses across the construction, hospitality and retail sectors. It supports 1,300 customers, including 200 channel resellers, with services covering connectivity, SD-WAN, cyber security, IT managed services, mobile, IoT, UCaaS and CCaaS.
Clearwater International and Livingbridge did not reply to Reorg’s request for comment at the time of the publication.
– Lucía Camblor