nito -

Kerv looks for growth with fresh backer

Managed services player Kerv targets more mid-market activity after changing private equity backers

Managed services player (MSP) Kerv has landed fresh private equity backers as it targets future mid-market growth.

For the past three years, Kerv has been working with private equity investor LDC, which is now recalibrating its involvement with the business and exiting, with Bridgepoint announcing a strategic investment in the MSP.

The LDC relationship saw Kerv grow revenues from £20m to £100m, grew EBITDA from £3m to almost £20m, and increased headcount from 100 to 700.

The arrival of a fresh backer will see Bridgepoint taking a majority stake in Kerv, with LDC reinvesting £30m to support the business. The financial terms of the transaction were not disclosed.

Apart from the changing of majority stakes, it is business as usual, with Kerv founders Alastair Mills and Mike Ing, alongside the rest of the firm’s management team, continuing to lead the business.

Robin Lawson, partner at Bridgepoint Development Capital, said that the firm had tracked Kerv’s progress and saw the firm’s growth potential.

“We are thrilled to partner with Alastair, Mike and the senior team at Kerv Group, a company we’ve followed closely since its formation in 2020. Their approach to growth, combining leading organic development via exposure to high-growth elements of the technology sector supplemented with strategic acquisitions, positions them strongly for the future,” he said.

“With the core Kerv platform now built, BDC’s support will help Kerv to expand its product sales, cross-selling opportunities and an increasing focus on industry verticals,” he added. “We are excited about Kerv’s prospects for further expansion, and we are confident that our investment will support its journey towards becoming a global leader in the digital services sector, both organically and via future M&A.”

Mike Ing, group managing director at Kerv, said that the company had delivered growth in the past three years, but believed there was more to come with Bridgepoint’s involvement.

“We were keen to partner with an investor whose values resonate with ours, one who shares our mission to harness the power of technology for the good of our people, our customers, our society and our planet,” he said.

As he looked back on the progress made in the past three years, Alastair Mills, co-founder and executive chair at Kerv, said the business had achieved its ambitions.

“In 2020, we had an ambition to create a technology business that truly put customers and employees first, recognising that this is the key to long-term, sustainable growth, and I’m proud to say we’ve achieved that goal,” he said.

“Kerv is still less than four years old, and so I’m really excited to see what’s possible with the support of both LDC and Bridgepoint in this next chapter,” he added.

From an LDC perspective, Aylesh Patel, partner and head of South at the private equity player, said the past three years had proved the original concept outlined by Kerv’s founders was a sound one.

“They brought together three complementary businesses at the height of the Covid-19 pandemic and have created one of the fastest-growing cloud and digital services providers in the UK. Their focus on creating a great place to work and delivering exceptional customer service underpins consistently high organic growth and supports the successful integration of acquisitions,” he said.

“We first backed the team at a time when many investors had paused activity during the pandemic, and we’ve been there with follow-on funding to support acquisitions as Kerv kept growing.”

Read more on Finance and Credit