Equiteq advises on Dartmouth Partners and The NAV People transactions
Continued merger and acquisition activity in the consulting industry has seen Equiteq advise on multiple deals in 2018. Most recently, this saw the specialist consultancy support Dartmouth Partners as the firm secured a minority investment from Literacy Capital, and The NAV People on the firm’s management buy-out.
A spiraling demand for management consultancies capable of marshaling digital transformations was behind a major spike in M&A activity in professional services in 2017. While M&A activity across the industry was robust last year, digital disruption has continued to drive demand and premium valuations for firms in a variety of hot spaces in 2018.
The continued activity has seen merger and acquisitions specialist firm Equiteq advise on a succession of deals over the past six months. These include the acquisitions of Ducker Worldwide (by Frontier Strategy Group) and Axentel Technologies (by Park Place Technologies) in February, and the purchase of c3consulting by Ankura Consulting in April. Now, the M&A advisory firm has announced its participation in two further deals.
Dartmouth Partners & Literacy Capital
Rapidly expanding boutique consultancy Dartmouth Partners has partnered with Literacy Capital, a move which sees the venture capital and private equity firm purchase a minority investment in the firm. The deal is aimed at boosting the consultancy, which has already grown into a leading recruitment firm that works to help clients recruit rising stars and future leaders, amid a tightening human resources market.
Dartmouth Partners was founded in 2012 by Logan Naidu, with a focus on placing graduate to director level staff in the financial services, legal and corporate development and strategy sectors. Over the past six years, Dartmouth Partners has subsequently opened offices in London and Frankfurt – the city tipped to replace the UK’s capital as Europe’s finance hub after Brexit – and has ambitions to add new locations in the near future.
Partnering with Literacy Capital, in a transaction which closed in mid-June, is aimed at supporting these geographic and sector expansion goals, as well as the firm’s continuous investment in growing and developing its current teams. On top of this, the deal will see Dartmouth boost the newly installed members of the firm’s strengthened senior team, following the appointment of Jess Watts – formerly the CEO of recruitment company R4S – as non-executive Chairman and Neil Cartwright – previously CFO of online estate agency Purplebricks – as CFO.
Literacy Capital’s Chairman and former Capita CEO, Paul Pindar, said, “We look forward to working with Logan and the Dartmouth team. Logan has terrific ambition and the business has great potential. The next few years are likely to be a very exciting journey and we will provide all of the support that we can.”
Remarking on the opportunity the minority investment from Literacy Capital presents, Dartmouth’s CEO, Logan Naidu, commented, “We’re greatly looking forward to working alongside them, disrupting the recruitment market and helping to achieve our ambitious goals and helping build our clients’ businesses.”
Equiteq advised Dartmouth Partners on the deal, and regarding the consulting firm’s role in the transaction Naidu added, “We’ve worked with Equiteq in the past as a client and got to know them well. Their focus on working with companies in our sector made them the obvious choice when we were considering our options.”
Discussing the transaction, Ed Groome, Managing Director of M&A in Equiteq’s London office, stated, “It’s been a pleasure working with Logan and the team at Dartmouth to help them find the right solution for the next, exciting stage of the company’s growth. With Equiteq’s knowledge of this market, we were able to identify Literacy as the ideal partner to support their ambitious growth plans.”
The NAV People & FPE Capital
The NAV People (TNP) has completed a management buy-out (MBO), which was led by the existing management team and backed by investment from FPE Capital. Founded in 2009, Newbury headquartered TNP has grown to employ around 140 staff. The firm bills itself as a value-added reseller of Microsoft Dynamics NAV and Dynamics 365 enterprise resource planning software. TNP therefore provides software, implementation and support services to mid-sized corporate clients primarily based in the UK.
Now, as the MBO concludes for TNP, the firm will continue to be led by incumbent CEO Ian Humphries. Humphries has worked in the NAV sector for over 20 years and was a founder of Alpha Landsteinar, one of the first NAV partners in the UK. He is joined by Paul White, who has arrived at TNP as a non-executive Chairman following the deal. White is a former lead of Microsoft UK’s Dynamics product suite, bringing 25 years of experience in Microsoft Dynamics and broader Enterprise Software with him.
The deal was completed with backing from FPE Capital, a private equity investor specialising in making funding dynamic, growth companies in the lower mid-market in the UK. FPE is continuing to partner with the existing TNP management team.
David Barbour, Managing Partner at FPE, said of the deal, “We are delighted to be partnering with Ian and his team. TNP’s growth has been impressive in recent years, whilst its strong focus on team culture and service quality has driven industry leading customer satisfaction levels. We see TNP as uniquely positioned in the Microsoft ecosystem and look forward to driving the shift towards the next generation of the Dynamics NAV product set.”
Ian Humphries added, “We are very pleased to be in partnership with FPE who have shown a great understanding of our business model and enthusiasm to assist us in growing the business. FPE’s significant experience in enterprise software and with scaling businesses will help us to drive TNP to the next stage of growth.”
Equiteq advised TNP on the transaction. Discussing the deal, Equiteq’s Ed Groome said, “With a strong record investing into software and business services companies, FPE are the ideal partner to support Ian and the management team in the next period of growth for the company. It’s an exciting period of change across the Microsoft ecosystem and TNP is now exceptionally well positioned to exploit the opportunity.”
