ThinCats business originator Maureen Armstrong
Network ROI, a Midlothian-based IT firm, has completed a successful employee buy-out after receiving £1m in funding from alternative finance specialist, ThinCats.
Founded in 2003 by Sean Elliot, an IT professional and entrepreneur with more than 30 years of experience in the sector, Network ROI’s initial focus was to provide IT support to companies in Scotland.
As the company grew, its focus also expanded to delivering a full range of managed IT and connectivity services to organisations throughout the UK.
Having put the company on a strong growth trajectory, Sean looked to its next stage. He said: “We started looking at this in 2012.
“I was coming up to 50, and we began to look at an exit strategy and a business plan to support that. I considered the usual options such as a trade sale, but came across the concept of employee ownership.”
The company needed £1m to finance the transition, and went looking for sources of capital.
Sean continued: “We had a beauty parade and narrowed down potential funding sources to two – ThinCats and a conventional high street bank.
“While the bank’s business development people were keen to construct a loan that was viable for us, when it was referred to the credit committee we were presented with more draconian covenants, such as a shorter repayment term and taking all our business to the bank, which made the deal a lot less attractive.
“We never got to meet anyone from the bank’s credit committee – it was like dealing with a third party we never saw - but ThinCats business originator Maureen Armstrong made the process easy and straightforward, and they became our preferred option.”
Network ROI now has 32 employees, all with a stake in the business as a result of ThinCats’ financing.
Sean added: “The loan has allowed us to transition to full employee ownership, facilitating my succession. When we complete the second five-year phase, we may well look to ThinCats to refinance that.”