Software Circle secures £25m facility to continue M&A strategy

Manchester-based Software Circle, an acquirer and operator of vertical market software businesses, has agreed a new £25 million committed revolving credit facility with Santander UK.

The new facility will enable the continuation of the group’s acquisition strategy, while providing greater flexibility and reducing its cost of capital.

The facility consists of a committed £25 million revolving credit facility, as well as a £10 million uncommitted accordion option, which can be exercised subject to approval from Santander’s credit committee.

Software Circle also revealed that £10.7 million of the facility has been utilised to redeem its pre-existing borrowing facilities with previous banking partner Shawbrook Bank.

Gavin Cockerill, Chief Executive of Software Circle, said: "The move to this new facility is a reflection of Software Circle's growth and the successful execution of our strategy to date. With the Group now at greater scale, the time is right to move to a more flexible facility, reducing our cost of capital and providing the headroom to continue our strategy to acquire and operate vertical market software businesses in the UK and Ireland.”

Jack Buck, Relationship Director, and Sarah Laverty, Director, Structured Finance, Santander, added: "Software Circle has a clear and disciplined approach to acquiring and nurturing specialist software businesses.”

"Having taken the time to understand its business model and the ambitions of Gavin, Iain and the wider management team, we are delighted to support the next phase of its growth with a flexible funding structure designed around its long-term strategy."

Software Circle has also issued a trading update, saying it has achieved a further year of progress, with 22 per cent revenue growth and 81 per cent growth in Adjusted EBITDA, along with the continued successful execution of its M&A strategy.

Gavin Cockerill continued: "Having surpassed our "Gate 4" goal of achieving £5m of annualised Adjusted EBITDA, the Facility will help fund our journey towards our "Gate 5" goal of achieving £15m of annualised Adjusted EBITDA."

Previously operating as graphics industry software provider Grafenia plc, Software Circle first announced its acquisition plans in 2021, focusing on becoming a serial acquirer of Vertical Market Software businesses.

Since then, the company has acquired a number of software businesses spanning sectors including Graphics, E-commerce, Finance, Property and Care Management.

M&A activity is booming across the Technology, Media & Telecoms sector - Read more in this exclusive insight

Find out more about the wide range of funding options available to businesses looking to grow via M&A

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