CVC secures first deal from growth fund

The sale of Wireless Logic generated a 6.1x return for ECI’s ninth fund

CVC Capital Partners has acquired machine-to-machine network Wireless Logic from ECI Partners, its first deal from its technology growth fund, according to a joint statement from CVC, ECI and Wireless Logic.

It is unclear how much CVC paid for the business, but the sale generated a 6.1x return for ECI 9, a 2008-vintage £437 million fund (€589 million; $665 million).

Both CVC and ECI declined to comment further on the transaction.

Formed in 1999 by managing director Oliver Tucker and sale director Philip Cole, Wireless Logic works with more than 950 application providers, system integrators and enterprises, delivering managed services including management and monitoring software platforms, a cloud-based private network infrastructure, and specialist cellular and satellite connectivity.

ECI backed Tucker and Cole in buying back Wireless Logic from Phones International Group, owned by entrepreneur and Dragons' Den star Peter Jones, for £35 million in 2011, according to a statement on ECI's website.

During ECI's ownership the company expanded internationally, opening offices in France, Germany and Spain, and almost tripled its underlying subscriber base to around 1.5 million, with profit and revenue growth of more than 25 percent per year, according to the joint statement.

This is the third divestment from ECI 9. In March 2014 the firm booked 6x on the sale of CarTrawler to BC Partners, and last October the firm sold XLN Business Services to GSO Capital Partners, a division of the Blackstone Group, in a deal generating a 3x return. Together these three exits have returned more than 80 percent of the fund to investors, according to a source with knowledge of the matter. There are 12 companies remaining in the portfolio. 

CVC's growth fund, led by managing partner John Clark, whom CVC hired from Welsh Carson Anderson & Stowe in April 2014, is currently in market targeting $750 million, of which around half is thought to have been collected. The vehicle will focus on mid-market high-growth companies in the software and technology-enables business services sector, primarily targeting equity investments between $50 million and $200 million in North America and Europe.