Donation processing firm Valldata in management buyout

The buyout team says there will be no redundancies at the company, previously owned by Livingbridge

The charity donation processing firm Valldata has been sold to its management team by its private equity owners for an undisclosed sum.

Greg Michael, chief executive of Valldata, who led the buyout, told Third Sector that he, Andy Skinner, the company's chief financial officer and Adam Smith, its director of sales and marketing, received financial backing from a group of individual investors he declined to name, but who he said had experience in providing services to the charity sector.

The company was previously purchased for £6.5m by the private equity firm Livingbridge in 2011.

Charity Pay, which runs a service that reduces the VAT burden on charities, has also been sold as part of the deal, which was completed last Friday.

Charity clients listed on Valldata’s website include WaterAid, Médécins Sans Frontières, Kidney Research UK, Sightsavers and World Horse Welfare.

Michael, who joined Valldata in July, said the deal was motivated by Livingbridge’s desire to exit its investment and the management team’s wish to put more funding into the company’s technological capabilities.

He said Valldata was not in financial difficulty and there would be no redundancies among the 175 staff employed by the two companies. He said that, together, Valldata Services and Charity Pay generated pre-tax earnings of more than £1m and a turnover of £7.5m in the year to March 2016.

The figures represent a decline on the £9.6m turnover the companies generated in the year to March 2015, according to their accounts. The pre-tax earnings for last year were not recorded, but the accounts show that they registered a combined operating profit of £523,000.

The 2014/15 accounts showed that the Valldata Group, a shell company created for the purposes of Livingbridge’s investment, had debts worth more than £3m due for repayment within a year and debts of more than £11m falling due after more than a year. It reported an operating loss of £263,000 that year.

Michael said the sale transaction had strengthened Valldata’s balance sheet by £10m, significantly reducing its debt.

The Valldata Group would be put into administration, Michael confirmed.

Companies House records show that three directors resigned from Valldata Group in January and February. One of these, Jasmine Whitbread, the former chief executive of Save the Children International, left the Valldata board after only six months. Michael said this was because she was unable to give the business the time commitment it required.

Michael said he and Andy Skinner would hold seats on both Valldata and Charity Pay’s boards from now on, with additional directors being added as and when necessary. 

Michael said Valldata would consider acquiring other businesses that would enhance its product offering.

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