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Private Equity Acquires Microsoft Cloud MSP: ECI Buys BCN Group

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Private equity firm ECI Partners has acquired BCN Group -- a major Microsoft-focused MSP in the United Kingdom -- from Beech Tree Private Equity. Financial terms of the deal were not disclosed.

This is technology M&A deal number 561 that ChannelE2E has covered so far in 2022. See more than 1,000 technology M&A deals involving MSPs, MSSPs & IT service providers listed here.

Microsoft MSP Acquired: About BCN Group

BCN Group, based in Manchester, United Kingdom, has 178 employees listed on LinkedIn. The MSP, founded in 2009, now supports 1,000 customers and 30,000 end-users. BCN Group is a Microsoft cloud service provider and gold partner. The company has acquired at least five MSPs and IT service providers since 2018. Key BCN Group buys included Blue Logic.

Beech Tree had owned BCN since about 2018. BCN Group's annual turnover during that time grew from £10 million (approximately US$12.28 million) turnover to over £40m (US$49.1 million), Beech Tree indicated. Beech Tree generated a 5.3X return on their investment by selling BCN to ECI, the seller indicated.

BCN Group's new owner, ECI Partners, typically invests alongside management teams in deals valued at up to £300 million (US$368 million).

BCN Group Acquired: Executive Perspectives on MSP Investment

In a prepared statement about the new investment, BCN Group CEO Rob Davies said:

"ECI are an experienced technology investor, so we are obviously delighted to be partnering with them to deliver on our organic growth potential and to continue to deliver on our M&A strategy."

Added Mark Keeley, a partner at ECI:

"BCN Group is a fantastic business that puts the customer at the heart of its organisation. The rising importance of IT, digital transformation and cloud adoption, combined with BCN’s excellent customer reputation, means that BCN is incredibly well positioned to further expand its capability, geographical presence and customer offering both organically and through M&A. We’re delighted to be partnering with Rob and the team for the next stage of their journey.”

Concluded Adam Rudd, partner at Beech Tree Private Equity:

“It has been a fantastic journey working alongside the BCN team and together we have built a business that we can all be proud of. When we backed them in 2018 we could see the potential to create a market leading Microsoft partner capable of supporting the entirety of a customer’s digital transformation journey. Through an alignment of our shared vision and a focused execution of our organic and M&A strategy, we have achieved what we set out to do. We have really enjoyed working with the BCN team and wish them the very best for the future. I am sure with the support ECI will bring the team they will continue on their journey to become the UK’s leading Microsoft focused MSP."

MSP Valuations: Strong EBTIDA Keeps Buyers, Investors Bidding

Despite financial market turmoil in the first of 2022, M&A activity involving MSPs has remained strong, and MSP valuations have generally held up well because there are so many buyers in the market and quality sellers generally have strong EBITDA (earnings before interest, taxes, depreciation and amortization), ChannelE2E believes.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.