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Several minority shareholders have exited the telecoms services business they helped fund in 2002 after its co-founders secured the backing of Zeus Private Equity.

Christian Nellemann and Anthony Karibian have taken control of XLN Telecom after Zeus invested £6.63 million for a majority stake in the business.

This was complemented by senior debt and working capital arranged by Jamie Szpiro and Matthew Male at Kaupthing Singer & Friedlander.

The funding will also support Nellemann and Karibian’s plans to continue the growth of the company, organically and through acquisitions.

A non-executive chairman will be appointed in due course with Zeus partners Gary Tipper and Tony Dickin also joining XLN’s board.

Dickin said the firm backed the company due to the strength of its management and the potential of its market. “With the ongoing shift to mobile and broadband usage set to continue, XLN has significant opportunities for future growth. The sector is highly fragmented and the plan is to grow the business organically and via a selective acquisition strategy.”

This is Zeus’ fourth deal, following its investments in IT services specialist Electranet (UK) and online floral and gift company Flowers Direct as well as its acquisition of Belfry House Hotel in Cheshire.

Zeus received legal advice on its latest investment from Halliwells, while Nellemann and Karibian were supported by Finers Stephens Innocent and accountant KPMG. Kaupthing was represented by law firm Pannone.

The deal was project managed by the Manchester and Southampton offices of Deloitte, which also compiled financial and commercial due diligence reports on the target company. The insurance review was completed by Marsh.

XLN has 90 employees at its London headquarters supplying fixed-line and broadband services to 70,000 small businesses.

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