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Inflexion Private Equity, the mid-market private equity investor, today announces that it has led the £12m MBO of Tekton Group, the fastest growing Enterprise Resource Planning (ERP) software provider to the UK construction and house building industries.
Headquartered in Central Manchester, Tekton’s products are used by customers as integrated accounting, resource application and planning tools that are particular to the industry. Employing 54 staff, Tekton is in the top three of the UK’s providers of specialist ERP products to the UK construction industry.
The buyout also includes the simultaneous complementary acquisition of SiteStream Ltd. SiteStream is the market leader in the supply of specialist house builder solutions including development appraisal, valuation and measurement. Based in Farnham, Surrey and St Louis, Missouri, SiteStream employs 28 people and can count 5 of the UK’s top 20 house builders as clients. Its sales have grown by 25% year on year in 2006 with a doubling of profits.
The UK construction market has grown every year for the last 15 years by 1-5% and is forecast to continue to do so through to 2012 driven in part by the demands of the London Olympics infrastructure investment. With increases in house building and continued population growth as well as increased public sector investment in infrastructure, growth in this sector has outstripped many other parts of the UK economy. IT spend within the market is forecast to grow by 8% pa as the sector becomes more aware of the benefits of good quality IT applications.
Inflexion-managed funds have invested £4.6 million. Management has also invested and a package of £5.3m of debt facilities was provided by HSBC Manchester. The transaction was introduced to Inflexion by Carl Houghton of Clearwater, Manchester.
Tim Smallbone, Director of Inflexion Private Equity said: “Tekton is a fast growing company in a dynamic industry and represents an ideal opportunity for Inflexion to invest. We are pleased to be able to back such an outstanding entrepreneur and anticipate the abundant growth opportunities available in the future.”
Richard Beaton, Chief Executive of Tekton Group said: “We look forward to working with Inflexion and taking the group to the next level of its development as well as the benefits that SiteStream’s incorporation will bring. Inflexion’s added financial and strategic input will benefit the company in enabling further market penetration as well as developing and introducing new products into new markets.”
Tim Smallbone and Catherine Richards led the transaction on behalf of Inflexion. Both will be taking seats on the Board of Directors.