Investment will fund the group’s ambitious growth strategy and new data-driven technologies
Xeinadin Group Limited (“Xeinadin” or “the Company”), one of the leading professional services groups in the UK and Ireland, has agreed a strategic partnership with Exponent, a private equity firm with a proven track record in professional services. This partnership will involve Exponent making a significant minority investment in Xeinadin to support the business’s ambitious growth plans. Subject to regulatory approvals, the transaction is expected to complete in Q1 2022.
Xeinadin is a group of business advisory and accountancy practices in over 100 locations across the UK and Ireland that provides over 40 service lines to over 50,000 clients, predominantly small and medium sized businesses and their owner-managers. It was formed through a merger of the offices in 2019 and is now structured into 14 regional hubs.
Xeinadin has more than1,500 employees across the UK and Ireland, and is one of the professional services market’s leading disruptors and consolidators, with annual revenues of over £100 million in its latest financial year.
The investment by Exponent will support the Company’s ambitions to grow significantly, both organically and through acquisitions and allow it to make further investments in innovative data-driven technologies to help drive efficiencies and improve the quality, breadth and delivery of services to its clients.
Under the new ownership, Mark Taylor and Tom Lightowler of Exponent will join Xeinadin’s Board, along with John Dwyer, an Exponent Operating Partner, joining as a non-executive director. Alastair Marsh will remain as Chairman.
Derry Crowley, CEO, Xeinadin Group, said: “We are very excited to be heading into the next stage of our growth. We have ambitious plans and have found the right investor to support us and drive forward our ambitions. The high level of interest we received from potential investors is testament to the huge achievements made so far by everyone within the Group in integrating over 100 firms and turning them into a cohesive and collaborative unit. We have a clear vision of where we want to go in the next phase of our development and we’re confident that Exponent is going to be invaluable in helping us achieve that.”
Mark Taylor, Partner at Exponent, commented: “Xeinadin is one of the leading consolidators in the UK and Ireland professional services landscape and has a huge opportunity in a highly fragmented market. We’ve been impressed by the work done to date by Derry and the team to build a profitable business with highly diversified sources of income, more than 95 per cent of which is recurring. We look forward to working with Xeinadin over the coming years.”
Around 4 million SMEs collectively spend £9 billion annually on professional services in the UK and Ireland, a number that is expected to grow steadily. Market growth is being stimulated by factors including the continued increase in quantity and complexity of government regulatory oversight, such as Making Tax Digital, audit requirements, and sustainability-related regulatory reporting requirements. This will continue to drive greater adoption of third-party outsourcing, tax and operational expertise.
There is also a growing trend for SMEs to outsource finance and other support functions, which is made easier by the increasing adoption of SaaS solutions including accounting software platforms such as Xero, a trend accelerated by the COVID-19 pandemic.
Exponent was advised by Macfarlanes, Evercore and KPMG, and Xeinadin was advised by Canaccord Genuity, Hill Dickinson and EY.
Established in 2004 and headquartered in London, Exponent is a leading private equity firm that partners with management teams to create market-leading businesses. The firm focuses on primary investment opportunities and specialises within sectors; applying an integrated operational model to deliver revenue-driven profit growth for its portfolio and investors. Now investing from its fourth fund, Exponent has raised more than €3 billion to date.
A selection of Exponent’s current and past investments include category-defining businesses such as Trainline, Moonpig, Ambassador Theatre Group, Dennis (publisher of ‘The Week’ magazine), Enra, Isio (formerly KPMG Pension Advisory) and Quorn Foods.