PC POS lb35m MBO backed by Barclays Private Equity

Barclays Private Equity has backed the lb35 million management buy-out of PC POS, a market-leading provider of retail technology hardware and services. As part of the deal, Barclays Private Equity, the pan-European mid-market private equity house, will take a 32.5% stake in the newly formed holding company, DigiPoS Systems Group Limited.

Founded in the UK in 1994 by Graham Worsfold, the DigiPoS Systems Group now operates across 12 countries worldwide. The company supplies ePoS technology to a wide variety of clients, such as Circuit City (North America), Spar (UK) and New Clicks (SA) within a number of retailing verticals. It distributes point-of-sale hardware systems and peripherals and offers project management and engineering support services to compliment its DigiPoS hardware brand which is now regarded as world-class technology.

The DigiPoS products are `retail hardened` - designed specifically for the retail and hospitality environments. This enables the systems to withstand humid conditions and continue operating in challenging surroundings often found in applications such as pubs and supermarkets. In the last year the products have also been approved for use with weighing equipment and are certified to work in petroleum-forecourt environments.

The products have been developed as open-architecture solutions using non-proprietary components which provide a low life-time cost to retailers. They boast unique features such as remote diagnostics and jet stream cooling functionality with a plethora of third-party software houses, making them the retail solution of choice in many countries around the world.

Mark Taylor, of Barclays Private Equity who led the deal, said: "The DigiPoS solution operates in a market that has experienced double-digit annual growth in recent years, with predictions that growth will continue at an annual rate of about 15%. Continued high levels of consumer spending in the UK and US, and the eagerly anticipated recovery in the company`s EMEA markets, suggests that the outlook for retailers is healthy. The competitive advantage that retailers can derive from up to date ePoS equipment is expected to drive further upgrade of systems, many of which are seven to 10 years old."

Taylor continues: "The MBO provides the management team with the opportunity to exploit the market, continuing to increase turnover and profit as done in recent years, both organically and by acquisition."

Tim Bittleston, Group CEO of the DigiPoS Systems Group, commented: "We are delighted to have secured Barclays Private Equity`s backing to help us continue to build a profitable and unique business-to-business company, and to capitalise on the potential of an excellent business in a growing sector. Barclays Private Equity understands the business focus and believes in our growth plans. We look forward to working with them to enhance the DigiPoS brand and market share across our global operations."

Paul Jules, Managing Director of PC POS South Africa, says: "The South African operation is now a wholly owned subsidiary of the new DigiPoS Systems Group and we are all very proud to be part of such a successful, fast growing global business."

The transaction was project managed and the management team was advised by Adrian Dray of KPMG Corporate Finance. Other advisers to the deal included PricewaterhouseCoopers (market and financial due diligence), Osborne Clarke (private equity legals) and Stevens & Bolton (management legals). Debt for the transaction was provided by HSBC.