Evolution Capital is delighted to announce its strategic review and three-year M&A, funding and advisory programme of London-based MSP Ridgewall has resulted in an investment in the business by leading private equity firm Inflexion.

The private equity investment is being made by Inflexion Enterprise Fund V, Inflexion’s dedicated lower mid‐market fund. The firm has also backed Ridgewall’s simultaneous acquisition of QDOS, a specialist provider of managed IT and communications to the hospitality industry, including leading international hotel brands.

Evolution Capital was commissioned in May 2017 to deliver a strategic review of Ridgewall in a bid to advise shareholders on which direction to take the business. The Evolution Capital advisory team explored various different strategic options including a sale, organic growth and a combination of acquisitions, funding and organic growth. This detailed review also included providing current and prospective valuations.

Shareholders had a target valuation in mind, however the review indicated the business was short of that target. Evolution Capital therefore set out a range of plans and options to advise and help shareholders achieve their goal over an appropriate time period.

The plan involved strategic M&A, funding and organic growth in value, including an increased focus on recurring revenue contracts as opposed to one-off and multi-service offerings.
Acquisitions had to fit the right profile and enhance value, ideally with synergies as well. Ridgewall agreed with the plan and Evolution Capital set about advising on implementation.

Acquisitions were made in 2018 (Connecting London, Telnet International) and 2019 (Nomis Connections), before the fourth acquisition (QDOS) at the same time as the partial sale to Inflexion last month.

Ridgewall’s chief executive Dominic McAnaspie said:

“Evolution Capital worked with us for two-and-a-half years and demonstrably enhanced value. The team’s thoroughness and attention to detail, their knowledge of the market and can-do attitude was exactly what we needed. The plan they put in place, with its focus on developing long-term customer relationships, enabled us to achieve our target valuation goal. Without Evolution Capital the deal with Inflexion would never have happened.”

Evolution Capital advised on the four acquisitions, including introducing and advising on debt funding from Clydesdale Bank, as well as the investment by Inflexion.
Ridgewall was established in 2011 and provides business critical services in IT, communication and cyber security to SMEs. QDOS-sbl is Ridgewall’s fourth acquisition in the last twelve months and enhances the company’s technical capability and international footprint as well as diversifying the client base.

The combined group now employs over 100 people, servicing around 1,800 customers.

Duncan Gregory, transaction services director at Evolution Capital, said:

“We’re delighted to have advised Ridgewall throughout such an exciting time in the company’s journey. We believe the combined group is now well placed to grow capital for investors in an exciting sector through a buy-and-build strategy. We have seen for some time that the sector is somewhat fragmented, creating genuine opportunities for such a strategy.”