Richard Haywood joins Clarilis as Chairman

Clarilis, the high growth legal technology business that provides drafting automation solutions to the Legal Industry, has appointed Richard Haywood as its Chairman.

Richard was a Corporate partner at Wragge & Co (now Gowling WLG) for 25 years and served as Managing Partner of the firm. He joined RPC as a Partner in 2013 and was a non-executive director of CloserStill Group Limited prior to a successful exit for Inflexion Private Equity and NVM Private Equity. He is currently a Consultant at RPC and Deputy Pro-Chancellor (Deputy Chair of Council) of the University of Birmingham.

Co-founded by James and Kevin Quinn, Clarilis launched its solution in 2015 and has quickly established itself as a leading platform in automated document drafting for the legal community. NVM Private Equity (NVM) invested in Clarilis in June 2018 to help the Company continue its growth trajectory, with the funding enabling the team to capitalise on the strong market demand they are experiencing.

Clarilis provides clients with significant efficiency gains in their drafting processes, reducing the time and resource required to produce initial drafts of documents. It counts both corporate in-house teams and private legal practices amongst its customer base. Customers include firms such as Addleshaw Goddard, Baker McKenzie, Burness Paull, Gateley, National Grid and Travers Smith.

Richard Haywood said: “I first came across Clarilis when RPC became an early customer. I was very impressed. The business combines a proprietary technology platform with an internal team of experienced lawyers and automation staff. This not only provides customers with the software, but also with the help they need to implement it. Too many software initiatives fail for want of this support. Private practice law firms and in-house legal teams are under increasing pressure to be innovative and efficient. Clarilis can help them meet those demands. I am really looking forward to working with the team.”

James Quinn, CEO and Co-Founder of Clarilis, added: “We are delighted to welcome Richard as our Chairman. We couldn’t hope for a better fit with our values and focus here at Clarilis. Richard’s extensive experience in senior leadership roles and work with GCs will be invaluable as we scale Clarilis in-line with our clients’ expectations.”

Highest levels of insolvencies for seven years reflects ‘challenging times’

The Insolvency Service has today published insolvency statistics showing that the number of individual insolvencies rose across the board in 2018 and reached their highest annual level for seven years.

This increase was mainly driven by individual voluntary arrangements (IVAs) which rose to a record high of 71,034 in 2018. Of the 115,299 people who became insolvent, 61 percent used an IVA.

The number of debt relief orders also increased to 27,683 in 2018, up 11.2 percent on 2017, while there were 16,582 bankruptcy orders in 2018, an increase of 9.8 percent on 2017.

Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: “It is a worry to see the number of people going insolvent at its highest level for seven years and this reflects the challenging times many people continue to face.

“With this increase driven in large part by a rise in IVAs (Individual Voluntary Arrangements) our concern is that many people in debt are being led down a route that may not be suitable for their circumstances. The prevalence of online adverts that promote ‘solutions’ to debt involving insolvency procedures may well be a contributing factor to this.

“Insolvency options should not be undertaken lightly and it is crucial that people receive free, impartial debt advice before deciding the best course of action to take.

“I would encourage anyone worried about their finances to seek free and impartial debt advice from a charity-run service like National Debtline.”

Q4 2018 insolvency statistics – R3 comments

Commenting on the Q4 2018 (October-December) England & Wales insolvency statistics (published this morning by the Insolvency Service), Stuart Frith, President of insolvency and restructuring trade body R3, says:

Corporate insolvencies

Excluding one-off ‘bulk insolvency events’, seasonally adjusted corporate insolvencies in 2018 rose 10% from 2017. Excluding these one-off events, there were 16,090 insolvencies in 2018.
Seasonally adjusted corporate insolvencies fell by 9% in Q4 2018 compared to Q3 2018, but rose by 11% compared to Q4 2017.
“After three years of relatively flat numbers, 2018 saw insolvencies creep back up to levels last seen in 2014. The pressure point for businesses most frequently cited by our members is weak consumer demand. People just don’t have much spare cash at the moment, reflected in the rise in the number of personal insolvencies also confirmed today. Although recent government figures showed that the weekly amount spent by households has hit its highest level since 2005, much of that expenditure went on housing and transport, with less left over for consumer outlay. This is having a big impact on consumer-facing businesses, such as retailers and the restaurant sector.

“This also spells bad news for businesses at one remove from the consumer, such as manufacturers supplying consumer products, shop fitters, or logistics firms. Every business is part of a network and one struggling business will affect others. R3 research from the middle of last year found that one in four UK companies had taken a financial hit following the insolvency of a supplier, customer or debtor in the previous six months, illustrating the reach and impact of the ‘domino effect’.

“Meanwhile, uncertainty around the shape of the final Brexit deal and future EU-UK trading relationship is already forcing businesses to hold off on investment decisions, again affecting their suppliers and customer networks. It has also prompted some companies to stockpile, putting a squeeze on cash flow and reserves.

“An area to watch in 2019 will be public service provision. Businesses, social enterprises and charities in the health and education sectors are being hit by a double whammy: Government funding or subsidies are being cut, while these sectors are also expected to pick up the slack for work that the public sector doesn’t have the resource to carry out anymore.

“Government proposals to give itself priority status for repayments in insolvencies may well have a negative impact on the ability of small businesses to finance themselves this year. With uncertainty in the supply chain, many businesses will be seeking to increase their stock levels to counteract this and will require new finance to do so. But if funders are concerned that the Government will take a bigger cut if things go wrong, then lending decisions become much harder.

“Across 2018, R3’s members across the UK reported that demand for their services – from advice on turnaround and restructuring processes to formal insolvency procedures – increased, and this has carried over into the start of 2019. We would encourage directors of companies which are finding current market conditions tough to seek out knowledgeable and qualified advice from a professional source. The earlier a company seeks advice, the more options it will have.”

Personal insolvencies

In 2018, there were 115,299 personal insolvencies, an increase of 16% on 2017, and the highest annual total since 2011.

Personal insolvencies rose 35% from Q3 to Q4 2018, and are 35% higher than in the same quarter in 2017.

“Personal insolvency numbers have been rising steadily every year since 2015, and 2018 was no exception. As banks and other lenders have tightened their credit standards in response to the Bank of England’s concerns around consumer over-indebtedness, many people have run out of road. In previous years, the ‘helicopter money’ provided by PPI refunds, along with generally less stringent lending requirements, helped to paper over the cracks that opened up as a result of a decade of persistently stagnant wage increases, but these avenues look to be closing themselves off. People are having to spend more of their income on housing and transportation, leaving less left over for savings and making budgets more vulnerable to shocks.

“It is notable that bankruptcies and Debt Relief Orders have risen over a year in which, if you look at the headline figures, England and Wales enjoyed record low levels of unemployment, which is something normally associated with fewer insolvencies. While unemployment is low, the nature of employment is much-changed. Working hours can be unpredictable and not necessarily well paid. That said, low unemployment may help explain rising IVA numbers: employment helps give people a platform for the regular debt repayments involved in the procedure.

“Inflation was above the Bank of England’s target rate for most of 2018, and although wage growth overtook inflation, there was still a considerable amount of lost ground to make up. For many people it would have been a case of too little, too late. Spending levels were maintained through debt or by using savings, but this is obviously unsustainable in anything other than the short term.

“Savings levels are painfully thin, exposing people to financial upsets. As an illustration of this, recent research from R3 and ComRes found that one in five British adults (20%) would find it somewhat difficult, very difficult or impossible to immediately pay an unexpected bill for an amount as little as £20, without assistance from an external source.

“It’s always important to look at the numbers for different types of insolvency procedures, as Individual Voluntary Arrangements, Debt Relief Orders, and bankruptcy numbers each tell us different things. IVAs are often used to deal with consumer debts, but IVA numbers can also be sensitive to changes in the debt advice market and can rise and fall independently of overall personal indebtedness. DROs and bankruptcy are perhaps better indicators of the state of the nation’s personal finances, so increases here are concerning. DROs are used by people with low assets and low debts, and show us the number of people for whom even small value debts are completely unaffordable. Bankruptcy is linked to job loss or insolvencies among small and medium-sized businesses and sole traders.

“There are measures being taken by the Government to help people in financial distress. The breathing space for people in debt is due to be introduced in the next few years, and will give indebted people a 60-day period free from creditor action to seek qualified advice as to the best way for them to resolve their situation. R3 has campaigned for the breathing space for many years and we are very pleased to see that it is nearing its launch.

“In the meantime, anyone with debt worries – especially if they have recently become more intense – should speak to a regulated and reputable debt advisor as soon as possible, for help and support as they decide on their next steps.”

‘Reality of Brexit uncertainty starting to bite as business and personal insolvencies soar’

Following the official insolvency figures for the fourth quarter 2018, Brian Johnson, business recovery and insolvency partner at H W Fisher & Company comments:

“The reality of Brexit, and the economic uncertainty caused by it, is beginning to bite. That much is clear from the latest insolvency figures. Until there is a greater certainty about Britain’s future, businesses and households will continue to suffer.

“Company insolvencies – when bulk insolvencies from 2017 are excluded, an aberration caused by the mass closure of personal service companies – rose 10% in 2018 compared with a year earlier and to the highest level since 2014. The economic uncertainty caused by Brexit will be responsible for a great deal of these insolvencies.

“Large companies are withholding investment decisions, which is already having a significant detrimental impact on smaller companies further down the supply chain. There is plenty of evidence of this happening in both the retail and construction sectors. Moreover, a lot of larger retailers and construction firms are stretching payment terms to the limit, heaping even more pressure on their suppliers. A disorderly Brexit will only exacerbate these issues meaning more companies are bound to go to the wall.

“The increase in Company Voluntary Arrangements (CVA) is also a significant concern with the rise in CVAs likely to have been driven by the retail sector last year, which faced a perfect storm of reduced consumer spending, internet shopping, an interest rates rise and minimum wage increase.

“Meanwhile, the rise in compulsory insolvencies of companies of 11.1% in 2018 compared with a year earlier highlights just how many companies were on life support throughout the last couple of years. The Zombie companies, so often spoken about over the last few years, are now being washed out of the economic system.

“But just as worrying is the large increase in individual insolvencies, up 16.2% in 2018 compared with a year earlier and to their highest level since 2011, while Individual Voluntary Arrangements (IVA) rose 19.9% to their highest ever level, showing just how much pressure households are already under.

“That pressure has already has a significant impact on consumer spending habits which is one of the reasons why retailers have suffered so greatly in the past year. Given the level of household indebtedness any increase in interest rates in the near term is likely to push these insolvency figures through the roof.”

Today’s Insolvency Statistics – reaction

An insolvency expert from top 20 UK business services firm Wilkins Kennedy says it is “worrying” that the number of people voluntarily making themselves insolvent in England and Wales is at its highest annual total on record.

The latest Insolvency Statistics published for Q4 from October to December 2018 reveal the total individual insolvencies increased to their highest level since Q2 in 2010 due to Individual Voluntary Arrangements (IVAs) rising to a record high quarterly level.

Total insolvencies increased for the third consecutive year to 115,229, the highest since 2011 which was mainly due to the increases in IVAs reaching their highest annual total on record.

Louise Brittain, Partner and Head of Contentious Insolvency at Wilkins Kennedy – which has 18 offices throughout the South East of England – said: “The increase in Individual Voluntary Arrangements (IVAs) shows that people are more financially aware and seeking help with their debts in a more timely manner.

“The fact that bankruptcies are lower than IVAs is indicative of the cost of making someone bankrupt which has risen significantly in the last two years.

“I think it is worrying that more people are in financial distress because the total number of insolvencies has reached figures we have not seen before.

“The High Street is suffering because people’s disposable income is being reduced by rising costs elsewhere, such as rising commute costs.”

The report also highlighted that the underlying number of company insolvencies increased in 2018 to 16,090, the highest level since 2014.

All types of company insolvency increased in 2018 compared with to the previous year except administrative receivership.

Louise added: “It is very worrying that the number of company insolvencies is at its highest level since 2010. More creditors are forcing companies into liquidation by quite a sizeable amount which means less directors are taking a financial hit.

“However the rise in Administration shows that directors are trying to take pre-emptive action to sell their business but clearly when that isn’t possible they are waiting for creditors to take action”.

Wilkins Kennedy is part of the CogitalGroup – an international business services group with annual revenues in excess of £450m, employing around 6,000 people across 176 offices.

Q4 2018 insolvency statistics – R3 comments

Commenting on the Q4 2018 (October-December) England & Wales insolvency statistics (published this morning by the Insolvency Service), Stuart Frith, President of insolvency and restructuring trade body R3, says:

Corporate insolvencies

· Excluding one-off ‘bulk insolvency events’, seasonally adjusted corporate insolvencies in 2018 rose 10% from 2017. Excluding these one-off events, there were 16,090 insolvencies in 2018.

· Seasonally adjusted corporate insolvencies fell by 9% in Q4 2018 compared to Q3 2018, but rose by 11% compared to Q4 2017.

“After three years of relatively flat numbers, 2018 saw insolvencies creep back up to levels last seen in 2014. The pressure point for businesses most frequently cited by our members is weak consumer demand. People just don’t have much spare cash at the moment, reflected in the rise in the number of personal insolvencies also confirmed today. Although recent government figures showed that the weekly amount spent by households has hit its highest level since 2005, much of that expenditure went on housing and transport, with less left over for consumer outlay. This is having a big impact on consumer-facing businesses, such as retailers and the restaurant sector.

“This also spells bad news for businesses at one remove from the consumer, such as manufacturers supplying consumer products, shop fitters, or logistics firms. Every business is part of a network and one struggling business will affect others. R3 research from the middle of last year found that one in four UK companies had taken a financial hit following the insolvency of a supplier, customer or debtor in the previous six months, illustrating the reach and impact of the ‘domino effect’.

“Meanwhile, uncertainty around the shape of the final Brexit deal and future EU-UK trading relationship is already forcing businesses to hold off on investment decisions, again affecting their suppliers and customer networks. It has also prompted some companies to stockpile, putting a squeeze on cash flow and reserves.

“An area to watch in 2019 will be public service provision. Businesses, social enterprises and charities in the health and education sectors are being hit by a double whammy: Government funding or subsidies are being cut, while these sectors are also expected to pick up the slack for work that the public sector doesn’t have the resource to carry out anymore.

“Government proposals to give itself priority status for repayments in insolvencies may well have a negative impact on the ability of small businesses to finance themselves this year. With uncertainty in the supply chain, many businesses will be seeking to increase their stock levels to counteract this and will require new finance to do so. But if funders are concerned that the Government will take a bigger cut if things go wrong, then lending decisions become much harder.

“Across 2018, R3’s members across the UK reported that demand for their services – from advice on turnaround and restructuring processes to formal insolvency procedures – increased, and this has carried over into the start of 2019. We would encourage directors of companies which are finding current market conditions tough to seek out knowledgeable and qualified advice from a professional source. The earlier a company seeks advice, the more options it will have.”

Personal insolvencies

· In 2018, there were 115,299 personal insolvencies, an increase of 16% on 2017, and the highest annual total since 2011.

· Personal insolvencies rose 35% from Q3 to Q4 2018, and are 35% higher than in the same quarter in 2017.

“Personal insolvency numbers have been rising steadily every year since 2015, and 2018 was no exception. As banks and other lenders have tightened their credit standards in response to the Bank of England’s concerns around consumer over-indebtedness, many people have run out of road. In previous years, the ‘helicopter money’ provided by PPI refunds, along with generally less stringent lending requirements, helped to paper over the cracks that opened up as a result of a decade of persistently stagnant wage increases, but these avenues look to be closing themselves off. People are having to spend more of their income on housing and transportation, leaving less left over for savings and making budgets more vulnerable to shocks.

“It is notable that bankruptcies and Debt Relief Orders have risen over a year in which, if you look at the headline figures, England and Wales enjoyed record low levels of unemployment, which is something normally associated with fewer insolvencies. While unemployment is low, the nature of employment is much-changed. Working hours can be unpredictable and not necessarily well paid. That said, low unemployment may help explain rising IVA numbers: employment helps give people a platform for the regular debt repayments involved in the procedure.

“Inflation was above the Bank of England’s target rate for most of 2018, and although wage growth overtook inflation, there was still a considerable amount of lost ground to make up. For many people it would have been a case of too little, too late. Spending levels were maintained through debt or by using savings, but this is obviously unsustainable in anything other than the short term.

“Savings levels are painfully thin, exposing people to financial upsets. As an illustration of this, recent research from R3 and ComRes found that one in five British adults (20%) would find it somewhat difficult, very difficult or impossible to immediately pay an unexpected bill for an amount as little as £20, without assistance from an external source.

“It’s always important to look at the numbers for different types of insolvency procedures, as Individual Voluntary Arrangements, Debt Relief Orders, and bankruptcy numbers each tell us different things. IVAs are often used to deal with consumer debts, but IVA numbers can also be sensitive to changes in the debt advice market and can rise and fall independently of overall personal indebtedness. DROs and bankruptcy are perhaps better indicators of the state of the nation’s personal finances, so increases here are concerning. DROs are used by people with low assets and low debts, and show us the number of people for whom even small value debts are completely unaffordable. Bankruptcy is linked to job loss or insolvencies among small and medium-sized businesses and sole traders.

“There are measures being taken by the Government to help people in financial distress. The breathing space for people in debt is due to be introduced in the next few years, and will give indebted people a 60-day period free from creditor action to seek qualified advice as to the best way for them to resolve their situation. R3 has campaigned for the breathing space for many years and we are very pleased to see that it is nearing its launch.

“In the meantime, anyone with debt worries – especially if they have recently become more intense – should speak to a regulated and reputable debt advisor as soon as possible, for help and support as they decide on their next steps.”

Late payments – Government and public authorities must use ‘project bank accounts’ says MP

Late payments campaigner, and MP for Oldham East and Saddleworth, Debbie Abrahams, has proposed a ten minute rule bill (15/1/19) calling for payments on government and public authority contracts to be made through a ‘project bank account’ system.

Abrahams, created the award winning Be Fair – Pay on Time campaign in 2012, and proposed the bill – titled Public Sector Supply Chains (Project Bank Accounts) Bill – to help ensure small businesses are paid directly and promptly, whilst also protecting them against losses, such as those created by the collapse of the construction giant Carillion, one year ago to the day.

She also set up and chaired a late payments inquiry in Parliament in 2013*, and said of the bill: “My bill aims to set in law the requirement that parties delivering government and public authority work, from the lead contractor right down through the supply chain, will receive payment from the same secure ‘pot’ of money.

“Late payment by large businesses is a massive issue across all business sectors leading to billions of pounds being owed to smaller companies for work that has been done.

“When payments take a long time working their way along a supply chain from the contracting authority there is a risk that the cash could be cut-off at any time because of payer insolvency.

“We witnessed the catastrophic effect this has with the collapse of Carillion, a year ago to the day, with £2bn of unpaid invoices to their smaller suppliers. The precarious position of other major Government contractors like Interserve means urgent action is required.

“That’s why my ten minute rule bill will require government and public authority work be paid to suppliers using project bank accounts.”

In her speech Debbie raised the case of an Oldham based company, Johnson Bros Ltd, who lost £176K, net of VAT, on unpaid invoices to Carillion after the construction giant collapsed.

Owner of Johnson brothers, Neil Skinner, who was in Parliament to watch Debbie’s speech, said: “A few years ago Carillion were reasonably okay at paying our invoices, but even this was based on the fact that we could threaten to stop working in the middle of a job if we didn’t get paid for the work we had done up to that point.

“They paid us under these circumstances but only because they knew any delay would look bad for their performance index. Even so, payments still often went over sixty days, with a lot of chasing, and once the job for a particular customer was finished our sanction, to stop working, was gone and their payments just stopped.

“Carillion finally resorted to using all the familiar late payment tactics from finding fault with an invoice, referral to their accounts office in India, statement queries, disputed invoices paid, and so on.

“Then, lastly, they imposed a 15% non-negotiable discount on our work or they would send all unpaid invoices back to their quantity surveyor’s (QS) department. We reluctantly signed this contract and they went ‘bump’ the Monday after signing and five days before the first part payment was due.

“As a result of Carillion’s late payment tactics small enterprises like mine have been suffering greatly, if not terminally.

“Large companies know late payment can destroy us small businesses but they rely on this tactic to ‘cook the books’ and be seen to be profitable themselves. Carillion went under owing us well over 15% of our average turnover and, following a difficult year last year, this money is much needed to help us survive.”

Rudi Klein, Chief Executive of Specialist Engineering Contractors’ (SEC) Group, which represents the interests of the specialist contractors across the UK, is a leading late payments campaigner and advocate of project bank accounts.

Klein said: “Given the precarious financial state of many of the UK’s major contractors Debbie Abrahams’ bill is now extremely timely.

“In fact it would now be very neglectful of Parliament or the Government to continue to ignore the concerns of SMEs in construction supply chains which have had to put up with payment abuse over many years.

“Project bank accounts are now acknowledged to be the most effective method of ensuring secure and regular cash flow.”

Martin McTague, Federation of Small Businesses, Policy and Advocacy Chairman said: “The scourge of late payments causes untold misery for thousands of small business owners, their families and their staff.

“Government, as a customer, should setting a good example here by using project bank accounts for major public procurement contracts. At a stroke this would prevent small suppliers going bust through no fault of their own, where a contractor goes bad – as happened with Carillion exactly one year ago.

“It is right and proper that there be cross party support for this bill. The fact is Whitehall simply doesn’t use project bank accounts nearly enough – that needs to be fixed.

“Projects that use taxpayers money should be spent to the standard taxpayers expect, not hoarded by prime contractors. MPs that support project bank accounts are standing up for small business.”

Target Group boosts client services and business development teams with two new hires

Target Group, the business process outsourcing (BPO) and operational transformation provider, has today announced the appointment of two significant hires in the client services and business development teams.

Neil Glover joins as Business Development Director, while Target also added David Facenfield as a Client Development Director within the client services team, as Target looks to strengthen its offering to clients.

Neil brings a wealth of experience from across financial services and the legal sector and has held positions at some of the largest global enterprises, as well as at EY, Freshfields, Proskauer and Withers. Through his experience, he has an expert understanding of the financial services sector and the challenges it faces, and an ability to guide clients through such challenges, helping them to capitalise on digital transformation and make improvements to customer experience.

Meanwhile, David has over 21 years of experience in business process outsourcing across a wide range of client facing roles, including account management, operations and change. David joins Target from Teleperformance and has worked at the likes of TalkTalk, Virgin Media and Firstsource Solutions in their outsourcing and client relationship teams.

Ian Larkin, CEO at Target Group, said: “It’s fantastic to have people of Neil and David’s experience join us at Target. Their combined expertise in financial services and outsourcing, as well as their impressive ability to build strong relationships with clients, is sure to be a great asset for Target.

“Target has been on a significant upward trajectory for a number of years and we want to continue on this growth path. As such, we have built a really strong proposition and I am looking forward to Neil and David helping to continually add value to clients and the business as a whole.”

Two PCI Excellence Awards for Eckoh in 2019

Eckoh plc (“Eckoh”, AIM: ECK), the global provider of secure payment products and customer contact solutions, has won two awards at this year’s PCI Excellence Awards.

For the first time, the Awards included two categories. A PCI DSS/GDPR and a Payment Security & Innovation Award, with Eckoh being named a winner in both.

CallGuard implementation at Thames Water won the PCI DSS & GDPR Compliance Award. This demonstrates that Eckoh solved more than just the client’s immediate requirements. It delivers well beyond the scope of the original contract providing security, peace of mind and reassurance to Thames Water’s bill paying customers. What’s more, Eckoh’s continuous innovation and broad breadth of solutions mean that Thames Water’s customer engagement can be ready to adapt to changing needs whenever it chooses.

ChatGuard for taking PCI DSS compliant, secure payments within a Web Chat session won the Payment Security Innovation Award. Eckoh were the first PCI DSS, Level One, Service Provider to carry out a secure payment within the actual Web Chat session. This demonstrates Eckoh’s ability to mirror the consumer’s desire to be able to channel shift and pay in their channel of choice

According to PCI and AKJ Associates event organisers, clients want unmistakable evidence that solution providers can implement their products on-budget and on-time. This view is reinforced by feedback from Eckoh’s clients including Thames Water.

“It was really important that we found a solution that was easy to use for our agents. They need to have confidence that, when they’re speaking to a customer with Web Chat, they can rely on the technology and they can reassure the customer that the payment that they’re taking is secure and will be processed without any issues. I’ve personally been out to see the solution in practice, to see that it actually does work, and it works well for the agents using it, and for the customer.” CFO Retail, Thames Water

Tony Porter, Global Head of Marketing at Eckoh, commented: “We’re delighted to be recognised for the third year in succession, for our market-leading solutions. We’ve long since been able to prove our ability in the voice channel securing payments with agents and IVR. There is a risk associated with utilising new digital channels and we’ve been able to extend to our ability to take secure payments in these channels, with Apple Pay and more recently within a Web Chat.

Berkshire Partners to Invest in Teraco Data Environments

Teraco Data Environments, Africa’s leading provider of colocation data centre infrastructure, today announced that Berkshire Partners LLC, a Boston-based investment firm, has entered into a definitive agreement to acquire a majority stake in the company. The Permira funds, an existing shareholder, will remain a significant investor.

Based in Johannesburg and established in 2008, Teraco is the largest provider of data centre services in Africa. The company offers vendor-neutral colocation and other related services in secure and resilient data centres. The Permira funds initially backed a Teraco management buyout in December 2014 and in that time the business has multiplied its capacity more than six times. The company operates five high-quality facilities with 30MW of critical power load serving more than 450 clients, including global internet companies, across five core ecosystems – telecoms, managed service providers, content, enterprise and financial services. With more than 13,500 interconnects, Teraco’s data centres are the most interconnected facilities in Africa, allowing clients to connect directly to each other, to the onramps of all major cloud providers, as well as to the continent’s largest and fastest growing Internet Exchange Point, NAPAfrica.

The data centre market in Africa is poised for continued strong growth with increasing demand for global applications, content, and the accelerating adoption of cloud services. Teraco has built a strategic position to capture this regional opportunity as a trusted and secure partner with resilient data centre facilities built to international standards.

Jan Hnizdo, Managing Director of Teraco, said, “Berkshire Partners is a like-minded and committed long-term partner that shares our vision for the future: to continue to invest in world-class data centre facilities, allowing us to support the digital interconnected enterprise, and meeting the high standards of service that are expected from us. Over the next few years, we aim to double our installed critical power load from 30MW to 60MW and we look forward to working closely with Berkshire Partners on this ambitious growth journey.”

Larry Hamelsky, a Managing Director at Berkshire Partners, said, “We believe that Teraco is exceptionally well-positioned to capitalise on the fast growth of the Sub-Saharan data centre infrastructure market given its highly interconnected ecosystems, well-designed facilities, and ability to offer a wide array of deployments. We are thrilled to be partnering with Teraco’s talented management team to support the company’s continued success.”

Michail Zekkos, Partner at Permira, added, “The past four years have been a transformational journey for Teraco, and we are very pleased to have played a role in growing the business, expanding its ecosystem, and delivering such strong results. We remain very committed to Teraco and the management team – something that is underscored by our funds’ continuing investment – and we are excited about bringing in a new partner to support further expansion. Continued secular demand driven by Sub-Saharan Africa’s digital transformation, the early stages of outsourcing, and cloud penetration means that the future looks very positive for Teraco, and we look forward to supporting the team.”

Lex Van Wyk, Chief Executive Officer of Teraco said: “Berkshire Partners has prior experience investing in data centres and appreciates the business that we have built. We are delighted to welcome them as our new majority shareholder. In addition, with the Permira funds staying on as a shareholder, there remains continuity in the shareholder base. It is business as usual for the employees and management team of Teraco, and more importantly, for our clients.”

The transaction is subject to regulatory approval and the customary closing conditions and is expected to close in the first quarter of 2019.