2escape2 completes two further acquisitions to complement existing portfolio of IT services

Gresham-backed IT services group, 2escape2, announces the successful completion of two acquisitions. This brings the total number of acquisitions made by 2escape2 to four since Gresham first invested £6.6m in July 2003. As a consequence of these acquisitions and strong core organic growth, annual revenues are expected to reach c.£50m in 2004, up from £6m at the beginning of 2003.

2escape2 was established in 2002 by chief executive Terry Burt, aged 46, and chief operating officer Mark McVeigh, aged 43. With Gresham's backing, Terry and Mark are using 2escape2 as a vehicle to buy and build a balanced portfolio of companies focused in the support, networking and managed services sector of the IT services market.

The management team brings an impressive track record to this venture. Through a combination of organic growth and a series of strategic acquisitions in 12 countries, they expanded turnover at their previous IT services business, 4Front Technologies, from $11m in 1995 to $253m in 2000. 4Front was sold in the same year to NCR for $270m.

2escape2's most recent acquisitions were Dutch-based companies Dynomic BV and Motifact BV. Dynomic's core competencies are built around network and systems management. Motifact offers high-level consultancy solutions for organisations such as Hewlett Packard, Deloitte and KPMG. Both offer complementary services to the 2escape2 Group and fit into the company's strategy of offering a complete matrix of services to customers.

HSBC Bank provided an initial debt package of £6m to help fund the latest acquisitions and, with Gresham, are committed to supporting 2escape2 in funding its aggressive buy and build strategy, with the aim of reaching turnover levels of £200m by 2006.

Terry Burt noted: "The acquisitions we have made in the last six months are a successful first step in our strategy of creating a strong IT services Group catering to mid-market customers. We have a number of further opportunities that we are currently pursuing and we look forward, with the continued support of Gresham and HSBC, to maintaining the momentum generated over the last year".

"2escape2 has over-delivered in every respect since our initial investment in July 2003 - we are committed to backing the business in 2004 to allow management to fulfil their growth plans," said investment director, Paul Canning, who sits on the 2escape2 board as a non-executive director for Gresham.

Paul Canning and Alastair Mills worked on the acquisitions for Gresham. Ian Crompton led the deal for HSBC bank. David Raff of DLA acted as 2escape2's legal adviser and Ian Paterson of Grant Thornton as its financial adviser.