• Sector: Technology, TMT
  • Location: South East
  • Website: www.arrowcommunications.co.uk
  • Date of investment: Aug-16
  • Exit date: Jan-20
  • GCP board members: Richard Shaw, James Blake

About

  • A business communications and IT service provider that offers seven principal product groups to its end customers: Mobile, Fixed Telephony, Hosted Telephony, Telephone Systems, Data, IT and Energy
  • Arrow can trace its roots back to 1995 and has over 5,000 customers including SMEs, mid-corporates and multi-national organisations
  • Arrow is highly effective in sourcing, provisioning, implementing and supporting complex technical solutions for its customers -a “service wrap” which is highly valued by its customers
  • Arrow supports customers from all industry sectors, however, there is particular expertise in the Professional Services, Retail and Hospitality and Manufacturing markets
  • The head office is based in Godalming with offices in London, Worcester, Cambridge, Newton-le-Willows, Glasgow, Aberdeen, Burton on Trent and Bracknell

Why we invested

  • Arrow is a resilient business in a robust market with high levels of recurring contracted revenue and excellent quality of earnings
  • The business communications market was benefiting from the trend towards convergence of solution and billing and continued transition to Cloud hosted/IT services and continues to see significant M&A and consolidation
  • Arrow exceled through its service differentiation in areas such as innovation, customer service, ease of doing business and flexibility
  • The experienced and high calibre management team had successfully completed and integrated seven acquisitions in the last six years, making Arrow an excellent platform for growth
  • With a proven track record, the Arrow team were focused on complementing organic developments with larger acquisition opportunities that strengthen their hosted, data and IT services portfolio

How we are making a difference

 

  • GCP provided all of the funding for the initial transaction, structuring the deal as a true partnership alongside existing and new management shareholders and ensuring deliverability
  • In addition, we successfully supported the business through 8 acquisitions, nearly tripling earnings and doubling the employee base whilst adding significant further scale and expertise in cloud telephony, energy and IT services in just 3 years
  • GCP provided hands-on support and significant added value to the buy and build strategy through assistance in sourcing of targets, deal negotiation and structuring and funding support
  • We also provided strategic board input and support to management as the business scaled and enhanced shareholder value
  • GCP completed the successful sale of Arrow to MML Capital Partners in January 2020 delivering a 2.8x return

“From the start, GCP’s partnership-led approach made them stand out to us and since then, they have been a great strategic ally, helping us both source and execute our buy and build strategy and prepare us and our expanded team for our next phase of growth.  Our shared values and culture have significantly contributed to the success of Arrow and the over achievement of our business plan and we thank them for all of their input.”

 

Chris Russell CEO of Arrow Business Communications