Pinacl CEO reveals why he sold up to a private equity firm

Rob Bardwell opens up to CRN on why he sold up to Aliter Capital and how its new war chest will help hit revenue targets

Welsh MSP Pinacl Solutions met its new owner Aliter Capital when it sought extra funding to meet new bid requirements, CEO Rob Bardwell told CRN.

The Internet of Things (IoT) specialist was recently acquired by private equity (PE) firm Aliter, which also owns fellow IoT provider Boston networks.

Bardwell (pictured) explained that Pinacl was seeking to enter Local Full Fibre Networks (LFFN) programmes which had certain funding requirements for city bids. The MSP went in search of venture capital to facilitate this, and that is how it crossed paths with Aliter.

"Our approach really was to get some gap funding in place and that culminated in Aliter liking us so much that it bought the company," Bardwell said.

"We went out looking for money to accelerate our growth and Aliter was looking for ICT companies to bring into its group."

Pinacl was founded in 1983 and has gone through multiple hands in the past, the most recent being those of Bardwell and his five fellow directors, who undertook a management buyout in 2015.

At the time, the five-year plan was to double revenue from £10m to £20m and then exit.

However, the company hit the £20m target last year, and with Aliter's funds at its disposal, Pinacl is now aiming to near £30m in its current fiscal year, which started this month.

"Our growth plans are for Pinacl to get closer to £30m in this current year from our current revenue of £22m - that's quite aggressive growth in a year," he said.

"In the LFFM programme, we are bidding for four contracts. If we were to win all four, that would bring us nearer £45m. We wouldn't get to bid for that work without the venture capital funds, which is how this all occurred."

Bardwell will continue in his position as Pinacl CEO.

He added that the six Pinacl directors have taken their money from the sale and reinvested it in the PE firm.

Aliter took a majority stake in Glasgow-based Boston Networks last year. It claimed that the addition of Pinacl to the portfolio will create a £50m-revenue business, with a headcount of 300.

The Scottish MSP has acquired two other companies since the PE house took ownership.

Boston Networks is operating a £6m IoT project in Scotland, which is part-funded by the Scottish government.

Bardwell said that neither company considers the other a competitor and that they have only faced off against one another in the IoT space.

"Boston up until now has been very Scotland-centric but we know of it because of the IoT works," Bardwell explained.

"There are no rules in place as to where either company can't go, but it's also seen that we are separate.

"There were discussions about what to do within the group, but it was felt that both companies were strong enough to stand on their own two feet and therefore would continue to run as separate entities."