Background

Babble Cloud Ltd. recently announced that it had acquired Lake Technologies Ltd; the second acquisition that Babble has made so far in 2020. Overall, it is the fourth deal build by the firm to help spur further growth and transformation since it received private equity backing in 2017 from LDC. Lake Technologies has provided business telephony and network services to its customers for over 26 years, who will now be able to take advantage of Babble’s ability to offer agile and efficient cloud-based solutions to organisations, allowing them to adapt to the changing working environments.

Choosing the right time

Evolution Capital conducted several face-to-face meetings with the owners of Lake Technologies who then decided that the right time had arrived to sell their business. Evolution Capital provided guidelines to the Lake management team and shareholders with the production of the relevant business information for them to conduct an independent process to sell the business.

Neil Needham, out-going Commercial Director of Lake Technologies, said “We have had an on-going relationship with Evolution Capital for some time and informed them of our intention to sell the company and asked them to find us some suitable buyers for the business. They put together a MOI and committed to find a suitable buyer. Acknowledging that confidentiality, knowing the marketplace and having relationships with buyers was key to the successful sale of the business the shareholders entrusted Evolution Capital to find a buyer that matched their criteria. The first potential acquirer they introduced us to had detailed and exacting criteria, which we matched completely, and the sales process started and ultimately completed very smoothly. Our main concern was the effect on the process of the COVID-19 lock-down as my previous experience of business disposal required a great deal of personal contact with the buyers. We had only met Babble, the eventual acquirers, on two occasions before lock-down but such was the detailed and efficiency shown by all parties that any ‘rocks in the road’ were dealt with quickly.”

Success despite an uncertain market

Despite the effects of the pandemic, the deal was efficiently concluded in good time; proof positive that carefully delineated buying criteria and a detailed timetable can be met and achieved in the most trying of business environments. 

Matt Parker, Babble’s CEO said, “This is another step on Babble’s rapidly accelerating ride towards £100m as we seek further acquisitions in partnership with LDC. I am delighted to have acquired another high-quality business in Lake Technologies. Both businesses have a focus on improving productivity and increasing customer engagement and organisational resilience whilst reducing costs, to deliver a rapid return on investment for clients.”
Neil Needham now part of the Leadership Team Integration & Digital Transformation at Babble continues, “During our 26 years in the telecoms industry at Lake, we focussed heavily on creating a robust business model that delivered fixed, recurring revenues which were exactly what Babble was looking for. Our operational discipline in producing highly detailed management information also served us well during the due diligence period and a good working relationship with Babble’s CEO Matt Parker enabled us to overcome any obstacles that arose during the process.”
Gary Smith, senior M&A Adviser for Evolution Capital commented, “The Lake transaction illustrates our knowledge and experience in the TMT marketplace, deep relationships with well-funded and active buyers and our ability to create an efficient and speedy transaction process. Fast-moving transactions like this are made possible by thorough preparation. Overall the transaction confirms the market remains open and there are well-backed buyers eager to acquire businesses in this current climate. The shareholders of Lake Technologies have demonstrated that sellers considering exit should not be afraid to sell at this time as good businesses will always attract good buyers.”

About Evolution Capital

EXPERTS AT UNLOCKING HIDDEN VALUE

Evolution Capital is a leading mid-market corporate finance boutique with a difference: we are experts at unlocking hidden value.

Specialising in the technology, media and telecommunications (TMT) market, we have been delivering outstanding results for our clients for decades.

With over 200 TMT clients and 75 completed transactions and £500m in transactions

For more information, contact: gary@evolutioncapital.com

Transaction team at Evolution Capital:

Gary Smith – Senior M&A advisor

Paul Davies – Senior Transaction specialist