Situation
In March 2000, ARC Associates incorporated HighSpeed Office Ltd to be an integrated communications provider serving business customers in multi-occupancy office buildings across metropolitan markets in Europe. HighSpeed Office provides a comprehensive single source communications solution for its customers including high speed, always-on internet access, local and long distance voice services, conference calling, enhanced messaging, private voice and data networking, web site hosting, business broadcast television and many other enhanced communications services like application service provision.
In January 2001, HighSpeed Office was selected as broadband service partner by a consortium of leading UK landlords, comprising British Land, Canary Wharf, Legal and General, Morley Fund Management and Prudential.
Having raised early stage financing from ARC Associates and Marconi Corporation plc during 2000, HighSpeed Office needed to raise £15 million to fund the roll-out of its UK business plan.
Approach
Given the poor market sentiment towards telecoms investments during the first quarter of 2001, particularly from the private equity community, ARC Associates pursued a parallel programme of investment discussions with both private equity firms and strategic investors (mainly the consortium property companies and Marconi Corporation plc).
Together with HighSpeed Office, ARC Associates developed the business plan, wrote the information memorandum and prepared presentation materials for investor discussions and managed investor presentations and initial discussions.
From the group of interested investors that emerged from the initial discussions, ARC Associates helped negotiate the key terms of the investment and assisted with the due diligence process through to closing of the transaction.
The Transaction
On 2nd April 2001, HighSpeed Office successfully raised £15.3 million from Marconi Corporation Plc, The British Land Company Plc, Canary Wharf Group Plc, Legal & General Property Ltd, Morley Fund Management Ltd, Prudential Property Investment Managers Limited and Morgan Stanley Dean Witter.