ECI Partners, a UK-based mid-market firm, has sold internet provider XLN Business Services to GSO Capital Partners, the credit affiliate of The Blackstone Group, and XLN’s management team, according to a statement.
The enterprise value was undisclosed, but the sale has netted ECI a 3x return, it said.
ECI did not respond to a request for comment at press time.
XLN Business Services provides fixed line and broadband internet, as well as energy and bank card processing services to small businesses across the UK. It has a particular focus on micro small and medium sized businesses which have between one and 10 employees.
ECI invested in the business in September 2010 and since then has made two bolt-on acquisitions: Card Processing Solutions, a credit and debit card processing service, and Shine Telecom, a smaller provider of fixed line telecoms to small businesses.
The investment was made by ECI’s Fund 9, a £437 million (€557 million, $698 million) vehicle which is almost fully deployed. This is the second exit from this vehicle; in March, it sealed its first exit when it sold CarTrawler, an Irish online car rental business, to BC Partners, netting the firm a 6x return. In the last 12 to 15 months, ECI’s exits have delivered a 3.7x multiple on aggregate, Sean Whelan, ECI’s managing partner told PEI last month.
The exit of XLN Business Services shortly comes after ECI closed its latest fund on its £500 million hard-cap after just five months in market. The firm officially launched the fundraising in April, targeting £400 million. The fund has the same strategy as its prior vehicles: targeting growth buyouts in the UK with an enterprise value of between £10 million and 150 million. The firm typically invests in TMT, business services, consumer, industrial and healthcare companies.