At press time, the fate of ECI Ventures, put up for sale by NM Rothschild earlier this autumn (EVCJ October 1999, page 5), remained unresolved. ECI managers and investors alike will, however, have been cheered by the news that ECI-managed funds have completed the major part of their exit from disaster recovery specialist Guardian iT, realising a total of GBP126 million ($210 million) from an original investment of just GBP5.5 million ($9.2 million). This figure equates to a 115 per cent IRR over the four-and-a-half-year life of the investment.
Guardian, which provides a wide range of computer-related disaster recovery and prevention services, was bought out from ICL in January 1995 and went public slightly more than three years later. ECI invested an initial GBP7.5 million ($12.2 million) of equity, later syndicating a proportion of its holding. The private equity house realised GBP22 million ($35.8 million) at the time of the IPO, disposing of 9 million shares at the issue price of 225p. Subsequent sales in November 1998 and March 1999 realised a further GBP66 million ($107.6 million). The latest disposal, which followed the recent announcement of Guardian iT’s interim results, involved 5.7 million shares, or 11 per cent of Guardian’s issued share capital, placed at a price of 680p, netting a further GBP38 million ($61.9 million) for ECI.
ECI senior partner Stephen Dawson paid tribute to Guardian iT’s management: “Considerable credit must go to Peter MacLean and Richard Raworth for their vision in taking the company forward over the last few years and creating very firm foundations from which it can continue to grow.”