Apax Partners Funds and Amadeus Capital Partners have invested $43m (E48.4m) in Red-M, a supplier of Bluetooth network product solutions.
Up to $35m in direct investment will go to Red-M. On top of that the private equity firms are paying $8.65m to Madge Networks in exchange for Red-M shares.
Madge Networks retains a minority interest in Red-M and will share voting rights with the new investors and the management team.
Red-M develops next-generation mobile data and voice services in the workplace using Bluetooth internet technology. As an internal start-up of Madge Networks, it has achieved a strong market position over the last 18 months. Robert Madge, chairman, of the company, said: “With the significant investment from Apax Partners Funds and Amadeus Capital Partners, and continued management support from Madge Networks, Red-M is well positioned to execute on the next stages of its business plan. This is a strong endorsement for both Red-M and the Bluetooth industry, and we are excited about the company’s prospects moving forward.”
Red-M was launched in May 2000 and has offices in the UK, Germany and the US. With the backing secured, it will now become a separate company. The cash raised will be used to pursue an aggressive growth strategy, accelerate new product and technology development, and further advance its position in the Bluetooth networking market.
Michael Risman from Apax and Hermann Hauser from Amadeus will join Chris Bradley and Kirstie Hallgate from Madge Networks as well as Red-M CEO Mike Wilson on the Red-M board.
“This is a strong external endorsement of Red-M,” said Wilson. “We have achieved an early lead in a market which is set to undergo tremendous growth over the coming years. This investment should enable us to execute on our business plan, fully funded, and take us to cash positive.”