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Dunedin backs £43m buyout of Trustmarque

By Dunedin,  June 10, 2013

Dunedin uses trademark DebtBridgeTM solution to back the buyout of Trustmarque

Dunedin, the UK mid market buyout house, has backed the £43 million management buyout of York headquartered Trustmarque Solutions (“Trustmarque”), a market leading provider of technology services and solutions to private and public sector organisations across the UK. The business was acquired from LDC in a deal that saw Dunedin employ its trademark DebtBridgeTM solution, which ensures deliverability and certainty of debt funding.

Trustmarque has been in operation for over 25 years and manages customers’ computer software and licensing from a wide range of developers including Microsoft, VMware, and McAfee. Its professional and consultative services enable organisations to optimise their IT resource, improve efficiencies and reduce costs. The business recorded revenues of over £130 million for the year ended 31 August 2012. Dunedin’s investment will enable Trustmarque to expand its service offering and correspondingly, its customer base.

The business employs 180 people at three sites in York (HQ), Bracknell and Edinburgh. It currently serves over 1,200 clients including RBS, Lloyds Banking Group, Sainsbury’s, the NHS, Ministry of Defence and a broad spectrum of local authorities and central government agencies. Trustmarque is the leading supplier of software and consulting services to the UK Government and was the first reseller of Microsoft’s products to achieve Gold licensing status, a title that is reserved for their most trusted and successful partners.

Trustmarque enjoys extensive market recognition. The Sunday Times ranked it as number 54 in their 2013 league of the best small companies to work for in the UK and the company has also previously been shortlisted by the National Business Awards scheme. Trustmarque’s CEO Scott Haddow was recently shortlisted for the prestigious Ernst & Young Entrepreneur of the Year awards.

Mark Ligertwood, partner at Dunedin commented: “We are pleased to be investing in Trustmarque, a highly successful market-leader with a clearly positioned brand and an exceptional reputation within both the commercial and public sectors. The UK market for software and IT services is currently worth an estimated £40bn and is expected to grow at 2%-5% to 2016. The UK’s IT market is second only in size to that of the US and Japan and the growth opportunities are significant as private and public organisations invest in the latest products to increase business efficiency.

“Trustmarque has earned extensive market recognition for its performance to date and this is very much to the credit of its first class management team.  We share their vision for the continued transformation of the business and look forward to working with them.”

Scott Haddow, CEO of Trustmarque commented: “Dunedin’s investment is a key milestone in the evolution of the business. Trustmarque has developed significantly over the last four years. Our ambition now is to cement our position as an independent end-to-end technology services provider and the trusted adviser of choice for blue chip organisations.

“Dunedin took the time to understand our business, the journey we are undertaking and our long term goals. They share our passion and drive and recognise the opportunities that lie ahead. Dunedin’s DebtBridgeTM product meant that the deal could get done quickly, while ensuring certainty of delivery to everyone involved.”

Under LDC’s ownership, Trustmarque transformed from an IT reseller into an added value provider of IT services and increased its services-driven revenues from a standing start to 33 per cent of turnover, while headcount at the business rose from 110 in 2009 to over 180. In 2011, Trustmarque acquired Nimbus Technology Systems as part of its strategy to enhance its cloud-based services offering.

Steve Harrison, Director at LDC, said: “Trustmarque has developed into a market leader in value added technology services. The transformation of the business is testament to the close working relationship that we developed with Scott Haddow and his team, but also the hard work put in behind the scenes to create a diversified business of significant scale in a highly fragmented market. We wish the business all the best in the future as it embarks on its next stage of growth with Dunedin.”

This investment follows three strong exits and the £34.5 million management buyout of Premier Hytemp, all of which have been completed by Dunedin during the last twelve months.  Dunedin has also completed a total of seventeen portfolio acquisitions since 2011.

Also involved in leading the deal for Dunedin were Dougal Bennett (partner), Jon Ma (investment director) and Jamie Moodie (senior associate).

Financial – BDO
Management – Korn Ferry Whitehead Mann
Market/Commercial – Armstrong / OC&C
Legal – Pinsent Masons
IT – Intuitus
Controls Review – Waypoint Change
Tax Structuring – KPMG
Corporate finance (vendors and management) - Sentio Partners
Legal (vendors) – Squire Sanders

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