Clydesdale backs buy-out of telecoms business

Clydesdale Bank Corporate & Structured Finance has backed private equity house ECI Partners in the secondary buy-out of XLN Telecom, the UK’s leading provider of telecoms services for small businesses.

ECI, which has acquired a majority stake from Zeus Private Equity, will continue to support founder and group CEO Christian Nellemann and his award winning management team to grow XLN both organically and through acquisition. Clydesdale Bank Corporate & Structured Finance provided funding as part of a three-bank club which also included Lloyds and RBS.

Founded in 2002, XLN is based in London and has 115,000 customers throughout the UK. It specialises in providing small businesses in the UK with high-quality, low-cost fixed-line, mobile and internet services via its own industry leading proprietary technology platform. In the last three years, XLN’s revenues have grown substantially from £27 million in 2006/07 to over £54 million in 2009/10.

Alison Taylor, director of Clydesdale Bank Corporate & Structured Finance in London, led a team which also included Mike Budge and Liam Caffrey. Alison Taylor said: “XLN is already the leading provider of telecoms services to small businesses and is one of the fastest growing companies in the sector. The market remains highly fragmented and as a result of this transaction the company will be well placed to continue its organic growth and its strategy of completing further acquisitions.”

Tom Wrenn, who led the deal for ECI, commented: “XLN is a superb growth business in a sector that has performed strongly during the recent downturn. It is led by a high-quality management team that has a clear vision for the future. XLN has considerable scope to add more products and services and is in an excellent position to act as a platform for consolidation in the fragmented telecoms market.”