A strong signal

While they talked over coffee, or a beer, or dinner, they heard plenty of positive news about the sector as well as the business. “Each time, we would hear that they had done what they said they were going to do. That gives you confidence in the management team and the business,” says Seb. It was the type of diligence that money can’t buy.

“It’s the holy grail: to build up a strong relationship with the management team over a prolonged period of time, before actually doing a deal,” says Seb. “If the arrival of an Information Memorandum is the first time you learn about a business, you are in competition with many others and are less likely to have an angle, differentiation or knowledge.”

When the time came for a process to be run, Equistone was the management team’s preferred party. The transaction was completed in March 2018, two years after their first contact. Several senior managers reinvested a significant proportion of their proceeds alongside Equistone. Palatine also co-invested for a minority stake.

Founded in 1988, WHP had become a mobile infrastructure service company, providing services across the mobile telecom supply chain in the UK. Its clients include the mobile network operators (MNOs), the two main asset and tower management companies, as well as technology providers or vendors (such as Huawei, Ericsson, Samsung, Nokia). Despite a relatively small number of customers accounting for the majority of its revenues, WHP was supporting all the key players across multiple contracts and on many programmes. Uniquely, it provided end-to-end solutions – from designing wireless sites and selecting, planning and acquiring those sites, and then managing them.

Telecommunications has become the fourth utility and, as the Covid-19 pandemic has underlined spectacularly, connectivity is crucial. With other utilities, people are trying to use less; with this utility, people are using more. Mobile data usage is only going in one direction.

While there were other similarly sized players, WHP was becoming the leader. “You could see they were moving away from their competitors, and their margins suggested that as well,” says Andi.

Immediately after the deal, however, there was a hiatus in WHP’s growth trajectory. This was created by changes in planning regulations around 5G, as well as problems in the market with equipment supplies.

“We could have asked them to aggressively pare the business back,” says Andi, “but we saw that with patience and resilience, the results would return. You have to hold your nerve. We gave them the breathing space to ride out those difficult months.”

Then, having taken the long-term view, along came 2020 and its worldwide disruption. But WHP had already started to accelerate and the pandemic was not going to stop it.

This growing confidence is something that has been encouraged by Equistone. “We did the deal on the way in, we are both on the board and will be through to exit,” says Seb. “We are partners of the management team. We certainly don’t meddle in the operations of the company or try to change the business, but we do bring constructive challenge with our support. That means asking what the company can do better or faster; what will move the dial. This is a management team is at the top table with their customers. They are having board-level conversations  and winning work because they are viewed as a partner and solution provider, not just a supplier who responds to tenders. They are increasingly being viewed as thought leaders in the industry.”

WHP has won a number of substantial contracts in 2020 – outside of tenders – which will underpin its medium-term growth. It’s future growth will be driven materially by the roll-out activity of MNOs (notably 5G), upgrades and maintenance of existing sites and older networks.

It is also extending into adjacent markets. Under the Scottish 4G Infill (S4GI) programme, WHP is helping to provide connectivity to over 40 Scottish ‘notspots’ by building and owning towers in remote parts of the country.

The company has made significant investment in its own cloud-based infrastructure, giving it instantaneous access to data which previously might have taken days or weeks. “It wasn’t painless but it has been well worth the investment,” says Seb.

At the end of 2019, WHP made a significant bolt-on acquisition with the purchase of Sitec. While the business had been in its sights for some time, the acquisition opportunity emerged suddenly and the team moved fast to secure it. “As soon as we were comfortable that it was a good fit, we gained approval to do the deal within two days of the presentation on the benefits of the combined business,” says Andi.

WHP’s progress under Equistone’s ownership amounts to more than a financial growth story. It is a real flourishing of potential, which expands into society. For instance, WHP is building up its management capacity while at a grass roots level, it has opened a Design Academy in Leeds to bring in graduates and train them up to be designers and programme directors.

Such is the power of a genuine partnership between premier management teams and investors who are completely behind them. ☐

A full version of this article appeared in PLATFORM 04, Winter 2020/21