Cloud provider FourNet receives private equity backing from Palatine

Manchester-based business counts 10 Downing Street and the Bank of England among its clients

FourNet, a cloud communications provider whose clients include 10 Downing Street, the cabinet office and the Bank of England, has received private equity investment from Palatine.

The private equity firm will take on a majority stake in the Manchester-based Avaya partner, which has annual revenues of £38m and employs more than 100 people, serving around 200 customers with a particular focus on the public sector.

"Our new partnership with Palatine further positions us as a prime player in the technology sector and we are delighted to be working with their team," FourNet CEO Richard Pennington said.

"The pandemic has been a catalyst for significant change in working practices and our industry over the past 12 months and fresh investment will enable FourNet to rapidly meet the changing needs of our customers, many of whom are critical to the UK's success following the pandemic, and to build and acquire the additional capabilities that our customers require.

"Palatine's investment will keep FourNet at the forefront of the industry and will also provide the fuel for us to lead further change across the sector, while allowing us to capitalise on the rapid growth in demand for cloud, collaboration and managed service solutions."

The company has recorded a three-year growth rate of nearly 55%, it says, and also has offices in London and Burton-upon-Trent.

It was founded in 2005 by Pennington, operations director Frank Jennings, chief technology officer Mike Jervis and sales director Steve Tyrrell and since 2017 it has been backed by YFM Equity Partners, which took a minority shareholding.

But the investment from Palatine will see YFM and two of the founding shareholders, Frank Jennings and Mike Jervis, now exit the business.

"We see significant opportunity for FourNet to strengthen its position in the marketplace as the go-to cloud services supplier to the public sector," said Andy Strickland, senior investment director at Palatine.

"As part of the strategy we will look at selected buy and build opportunities, but we also see great potential for organic growth.

"We also see a major opportunity to work with management to further develop the company's already strong ESG credentials, an area where there is ever-increasing awareness and significance during the public sector procurement process."