ECI Partners has acquired a majority stake in Citation, an employment law consultancy firm, for £50 million (€62 million, $80 million), according to a statement.
The UK-based firm used its £437 million ECI 9 vehicle, a 2008 vintage, for the investment. The deal was completed using approximately 50 percent equity and 50 percent debt, which was provided by HSBC.
Citation provides advice and compliance packages to 7,500 businesses in the UK on employment law and health and safety regulations. Since 2006, the company’s sales have risen more than 50 percent to £15.4 million for the year ended 31 December 2011. The company employs more than 200 people.
ECI Partners sees further growth opportunities for Citation within the UK, Richard Chapman, head of business services at ECI Partners, told Private Equity International. “There are an awful lot of regulations out there for employers. There were about 320,000 claims raised in the year to March 2012 by employees against their employers — if you are a director of a business that is unproductive time to be spent dealing with those claims,” he said.
In the next years, more regulations will come into force, he said, for instance the automatic enrolment for pensions. “From 2014, businesses that employ 50 to 250 employees will have to enrol its staff into pension schemes. Citation can draw up a policy for this, give advice on how to apply it and help businesses deal with employees that believe they haven’t applied it appropriately,” he added.
ECI Partners participated in an auction process, which was run by PwC. The investment in Citation is the ninth investment from ECI 9, which makes the fund 55 percent committed, Chapman said. The deal, which was technically done in 2012, marks the third investment of 2012. Earlier in the year, ECI Partners invested in Clark Energy, a distributor of gas engines and Rhubarb, a catering business.