Management buyout completed at £30m digital agency IDHL

Ingenuity Digital Holdings Limited (IDHL), the Harrogate-based digital agency, has completed a management buyout (MBO) of the business.

The MBO was completed with the support a funding package from HSBC and Frontier Development Capital (FDC).

The investments from HSBC and FDC follow a record financial performance in 2016 for IDHL, with revenues exceeding £10.5m.

The MBO, which values the business at £30m, has provided an a solid return for existing investors and enables the senior management team to become majority shareholders.

Founded in 2000, IDHL is now home to the Ingenuity Digital, WMG and NetConstruct brands. The business’ 120 strong team deliver a range of digital services to clients including TNT, Coast and Radley.

HSBC provided funding to facilitate the deal in partnership with FDC, a new funder focused on supporting regional business growth across the UK. This is the first investment from its newly launched National Mezzanine Fund.

Dennis Engel, chief executive of IDHL, said: “This investment will help continue our ambitious growth drive and support our clients with innovative new products and services.

“It has been a transformative 12 months for IDHL with management appointments, new headquarters and a strengthening of our expert team.

“The MBO will help us keep up this momentum into the future. I’m delighted for the exiting investors and the employees who’ve benefitted from their share options and I’m also pleased about the increased control and shareholding within the Business.”

Adam Kelly, HSBC’s area director for North Yorkshire and the Humber, added: “We are delighted to be supporting IDHL and its new owners, as it begins a new chapter in its history.

“The management team has an ambitious strategy to target new markets across the UK and increase its offering to customers. We look forward to seeing the business and its new management team continue to flourish.”

Ondrej Okeke, regional investment director at Frontier Development Capital (FDC), also commented: “This company is a perfect example of the type of business we are focused on supporting – a regional business with ambitious growth plans and a very credible management team.

“IDHL’s success to date has been based on its highly client-focused approach, underpinned by robust proprietary systems – with such a strong base and energy, we are looking forward to working with the team and seeing just how much they grow the business in the coming years.”

Andy Miller from Leeds-based Sentio Partners provided corporate finance services in relation to the transaction with Jonathan Jones and Andrew Fordham from Squire Patton Boggs providing legal advice to the company and management team.

PwC provided financial due diligence and tax advice. Legal firms Eversheds Sutherland and Addleshaw Goddard advised HSBC and FDC respectively.