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ITC signals growth plans with BGF backing
Managed services player indicates money will support both organic and M&A growth as it looks to widen its reach beyond North-East England
Managed service provider (MSP) ITC Service has landed a £7m investment it will be using to grow the business. The North-East England-based firm attracted the support of capital investor BGF, which identified the business potential the MSP offered.
Founded in 2016 by Christopher Potts and Peter Anderson, ITC Services supports more than 400 SME customers with a range of services, including managed IT support, security, Microsoft 365 cloud services, comms, consulting and digital transformation.
Plans for the cash injection include supporting further organic growth and funding acquisitions, which could be in neighbouring regions to extend the geographical reach of the business.
“Over the past 18 years, we have built a highly successful, respected business that has developed a strong and valued client base. With the ongoing support of my co-founder Peter, I am excited to lead ITC forward, to continue to grow and support our region, to help more local businesses achieve their goals and complete a carefully executed M&A strategy,” said Christopher Potts, founder and director of ITC.
“To fulfil this potential, we need an investment partner that is willing to take a long-term approach to support our growth ambitions. With an excellent track record of backing exciting and dynamic businesses in the North East, we are confident BGF is the right choice and we’re delighted to have the team onboard,” he added.
The deal was led by John Healey and Christian Pollard, investors in BGF’s Newcastle team, and Lee Shorten will join the board as non-executive chair as part of the deal.
“ITC is a real success story in the North East, where it has a long-established track record of delivering exceptional client outcomes. With an appetite to accelerate growth through a leading service offering combined with a client-focused approach, ITC is well-positioned to expand its footprint in the regional market,” said BGF investor John Healey.
Venture Capital has been a consistent investor in the MSP sector over the past few years and that should continue as market conditions improve into 2025.
The recent Budget had some impact on MSP consolidation, with increases in capital gains tax (CGT) announced, but Nicholas Hyett, investment manager at Wealth Club, said that things remained okay for the VC sector overall.
“At a headline level, venture capital trusts have been left unaffected by this Budget. Investors will still receive upfront income tax relief of up to 30%, plus tax-free dividends and CGT-free growth,” he said.
“However, in relative terms the scheme has become significantly more attractive. With income tax thresholds frozen for years to come and CGT rising, the potential for tax-free returns have become even more appealing.”
