GCA Altium acted as exclusive financial advisor to DBAG Fund VI on the sale of its investment in telecommunications and software company Telio, who have sold their stake to Charterhouse Capital Partners LLP, a UK-based financial investor.
Telio, based in Hamburg, Germany, develops, installs and operates communications and media systems for correctional facilities, thus providing a material contribution to the reintegration of inmates into society. Telio installs telephones and related systems in prisons, allowing inmates to make monitored calls from communal areas or directly from their cells. Telio’s product range also comprises TVs, DVD players, radios, as well as PCs with restricted internet access. The company’s economic success is driven primarily by investment in the requisite installations (cables and end devices) and proprietary software for controlling and invoicing usage. The software relieves prison officers of some of their responsibilities, thereby simplifying everyday life at correctional facilities. Telio is also planning the transition to internet-based telephony and other services.
DBAG and DBAG Fund VI invested in Telio in April 2016, within the scope of an MBO; they currently hold 83% of the capital, of which 15.3% is attributable to DBAG. Since then, Telio has evolved into a global market leader in inmate communications, together with the requisite technology and infrastructure. Sales have more than tripled; in 2020, revenues amounted to around EUR 83m. In addition to organic growth, the CAGR in excess of 22% has also been driven by acquisitions, for which DBAG and DBAG Fund VI provided additional funds on two occasions. The company also increasingly focuses on digital solutions, including the areas of video telephony and e-learning. Today, Telio’s systems are installed at 700 facilities in 21 countries worldwide. Europe accounts for 80% of Telio’s revenues, with 9% generated in Germany. Telio’s number of staff has more than doubled since the start of the investment, to 218 employees.
DBAG has successfully concluded its investment in Telio, selling its stake to Charterhouse Capital Partners. The stakes held by DBAG Fund VI (advised by DBAG) and by Telio’s management will also be sold.
“Telio has undergone a major transformation, once again improving its market position and providing another clear example that add-on acquisitions can decisively accelerate a company’s development – and, in the case at hand, its repositioning,” said Tom Alzin, member of DBAG’s Board of Management. He added: “It was not least the significant investment in internet-based communications that has enabled many inmates to maintain contact with their families in the past few months, despite pandemic-related restrictions on personal visits, through telephone and video calls.”
Corresponding agreements have been signed and completion is subject to approval by the authorities. The sale is expected to be closed within the next four months.
GCA Altium is the European business of GCA, a global investment bank that provides strategic M&A and capital markets advisory services to growth companies and market leaders. The firm offers worldwide coverage with over 500 employees in 24 offices across America, Asia and Europe. Built by the people that run the business, GCA is a firm of experts who focus on deals that require commitment, original perspective, skill and exceptional networks.
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