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Lumison begins ‘buy & build’ strategy

Lumison, the UK provider of connectivity, hosting and managed IT services, that was acquired by Bridgepoint Development Capital in October 2010, has made its first acquisition, Blue Square Data, a data centre based provider of colocation services.

BlueSquare Data, acquired in a transaction with an initial consideration of £22 million, operates data centres in Maidenhead and Milton Keynes, providing a high quality environment in which customers can locate their servers in facilities with highly resilient power, cooling and network connectivity and high levels of security. It also provides customers with well trained on-site engineers to deal with fault diagnosis, software and hardware issue resolution and server installation and racking, as well as the ability to carry out technical project work.

Lumison executive chairman Mark Howling said: “The acquisition of BlueSquare Data will more than treble the rack capacity we can now offer our customers and extends our catchment area of potential customers across the UK. Importantly, it means that our aim of creating a fully integrated, high quality, medium-sized services provider that can provide the full range of IT and network services that medium sized organisations need, has taken an important step forward.”

Bridgepoint Development Capital estimates that the total UK data centre hosting market is worth c.£15 billion and is growing at more than 10% per annum, driven by growth in data volumes and the trend towards companies outsourcing hosting requirements to third parties as the scale and complexity of these activities exceeds their internal IT capabilities.

According to Alan Payne, partner of Bridgepoint Development Capital, the original aim in acquiring Lumison, was for it to become the platform for further growth to which, through selective acquisition and organic growth, a broader and deeper range of services could be added.

“Data centres are scarce assets and the acquisition of BlueSquare Data not only allows Lumison to tap further into a large and rapidly growing market but also fits perfectly into our overall ‘buy and build’ strategy for its broader expansion within the important SME IT services market.” he said.

Additional equity funding for the transaction was provided by Bridgepoint Development Capital and Lumison’s incumbent bank HSBC extended existing facilities to provide further senior debt. Advisers involved in this transaction included: for Lumison – Travers Smith (legal), Deloitte (accounting due diligence), CIL (commercial due diligence), Regent (corporate finance); for BlueSquare Data management – Hogan Lovells (legal).

Further Information

Bridgepoint Development Capital (‘BDC’) provides funding to businesses headquartered in France, the Nordic region and the UK, typically buyouts valued up to €150 million. BDC has a team of 14 investment professionals wholly dedicated to its investment activity and operating from offices in London, Paris and Stockholm.

It is part of Bridgepoint, the international private equity group, which invests in businesses valued between €200 million and €1 billion across Europe, from a network of eight offices in Frankfurt, Istanbul, London, Madrid, Milan, Paris, Stockholm and Warsaw.

Lumison is a leading IT and data centre service provider, supporting mid market and enterprise customers throughout the UK. Founded in 1995, Lumison is one of the few business-class IT service providers to own and manage its own data centre facilities, providing high quality IP network, co-location and managed application hosting services.

Innovation and investment is key to the Lumison service model. The past 5 years of investment in the latest technology and service has yielded the 2007 ISPAs Best IP Telephony Provider, Nomination in three ISPA categories for best broadband, email and VoIP, and becoming a finalist at the 2010 BCS IT Excellence Awards for its Private Cloud services.

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