ECI sells Citation generating a 5.4x return

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Citation logo

ECI announced today (15th February 2016) that we have sold our investment in Citation to HgCapital generating a multiple of 5.4x money for our investors.

Citation provides HR and Employment Law, Health & Safety and ISO Certification solutions to 16,000 SMEs (focusing on SMEs with 1-100 employees).

In 2012 the shareholders of Citation had decided that they wanted to exit in full having grown the business successfully under their stewardship. In what is still a rarity in private equity, we backed a full management buy-in (MBI) team led by Chris Morris enabling the shareholders to sell their entire equity in the business.

Since we invested in December 2012, the business has been transformed through investment in people, technology and niche acquisitions.

Highlights include:

  • The customer base has grown from c.5,000 to c.16,000.
  • Employment has grown from c.200 in 2012 to what will be over 400 by the end of 2016 (a CAGR of c19%).
  • Revenue has grown from £20m to over £40m forecast in 2016 (a CAGR of 26%) and profits have grown at a CAGR of 32%.
  • Several million pounds invested in Atlas, the new online customer interface which is the only platform in the market that allows customers to manage their employment law and health & safety tasks on a single portal.
  • In 2015, Citation was named as one of the UK’s Top 100 Best Companies to Work For by The Sunday Times.
  • Significant improvement in customer service as demonstrated by market leading net promoter score (+18 compared to an industry average of -11) and a customer retention rate of 92%.
  • We supported Chris Morris and his team at Citation to make two acquisitions, QMS and Bibby Consulting & Support.

The Business Services team at ECI, led by Richard Chapman, identified the market for services to SMEs as highly attractive prior to our investment in Citation. There are 1.28m SMEs in the UK with 22,000 new businesses created each year. Currently 117,000 SMEs outsource employment law and health & safety services from specialist providers. Of the 1.16m who don’t, an SME survey suggests that c.550,000 would be open to the service.

Chris Morris, CEO at Citation (who previously worked with ECI as CFO at Laterooms), commented: 

It has been an enjoyable and rewarding few years working with ECI again to help transform Citation into the market leading business it is today. We are proud of what we have achieved and excited about working with Hg to continue to develop Citation.”

Chris Morris


Richard Chapman, Head of Business Services at ECI and director at Citation, commented:

It has been a pleasure supporting Chris and his team at Citation over the past three years, working with them to transform the company. Since our investment, the team have achieved a huge amount and created a business that understands its customers’ needs and delivers a high quality service they value.

This successful investment adds to our strong track record in backing high growth businesses in the tech-enabled business services sector. We wish the team every success with Hg as they continue to develop their role as a leading champion for UK SMEs.

Richard Chapman