Partner Article

Thomsons Online Benefits secures US investment

Thomsons Online Benefits has secured significant US investment from tech-savvy investor ABRY Partners, based in Boston. The private equity deal, which values the company at approaching £100 million, will enable Thomsons to support more UK businesses through major pension regulation changes, and will drive global growth, technology development and job creation.

ABRY will make substantial funds available to enable the company to make acquisitions and to expand both their global and UK regional footprint. It also plans significant investment into Darwin™, its , creating jobs in all areas, in particular technical development, and to develop further the Thomsons Academy increasing learning and development support for its own employees, clients and providers.

CEO Michael Whitfield said: “We conducted a robust selection process with multiple bidders from the UK, Europe and US, and ABRY Partners emerged as the clear winner. Highly successful and growing businesses like Thomsons, need quick decisions coupled with strategic support and like-minded thinking, particularly in a recession. We found that immediately with ABRY. Combined with their substantial technology portfolio, and their global influence in our market sector, the deal was an easy decision to make.”

“Part of the investment will go into strengthening and developing our UK workforce,” continued Whitfield. “This will help us to support more UK businesses and their employees as they face major pension regulation changes. We will also be investing to fuel our continued global growth in the Enterprise SaaS market.”

Brian St Jean from ABRY Partners stated: “Thomsons has had a period of phenomenal growth and success within the last 12 months especially, seeing earnings almost trebling. Add this to their award-winning technology, strong management team, impressive growth over ten years, and massive UK and global market opportunities, we saw this as too good an opportunity to miss. We are really excited to be investing in Thomsons with both the UK and global markets that they lead being at a tipping point. We back Thomsons heavily to dominate their space for many years to come and will also be looking for other opportunities in the UK and abroad in the near future.”

Whitfield warned: “There are currently no incentives for UK job creation, and this, as well as the general approach to business lending exhibited by many high street banks, is breeding anxiety throughout the UK investor community, leaving them wary and cautious. This is not the right recipe for economic recovery as we struggle to come out of this recession over the next few years.”

Existing angel investors Pi Capital and Westminster Growth Capital are replaced as the US firm takes a majority per cent stake in the Thomsons’ business. “Without the belief and support of both Pi and Westminster over the past eight years we would never have got to this strong position and we are extremely grateful to them. I am worried that the kind of speculative investors that we were able to approach back in 2005, no longer have the appetites for risk to back the entrepreneurial businesses of tomorrow, whose success UK PLC desperately needs in order to grow the economy, and exit this recession fully,” said Whitfield.

The remaining shares are held by the existing management team and staff led by CEO Michael Whitfield and managing director Chris Bruce, who together founded the company in 2000.

Thomsons Online Benefits has just closed the year ending December 2012 with revenues of £32.6 million and earnings (EBIT) almost trebling to £7 million compared with £27.3 million and £2.5 million respectively in the prior year. The partnership with ABRY will underpin the company’s growth strategy in the UK corporate and global enterprise markets that is expected to result in a doubling of revenues and a further trebling of earnings by the end of 2015.

This was posted in Bdaily's Members' News section by Thomsons Online Benefits .