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£18m management buy-out at Abingdon software company
A SCIENTIST who quit his job with computer giant IBM in 1980 to go it alone has sold his business to the management in an £18m deal.
Kevin Gell was the only employee when he set up Abingdon-based Tessella with a £3,000 overdraft to develop software for nuclear fusion research at Culham.
Now it has 210 employees – most with doctorates – and sales of £18.5m, a 10 per cent increase from 2010/11, having expanded into industries such as pharmaceuticals and energy.
Mr Gell repaid the bank loan and financed the expansion with profits. Now aged 62, he is taking a back seat, but will keep a 24 per cent stake and a place on the board.
The management buyout is funded by Mobeus Equity Partners in a deal drawn up by Oxford law firm Manches.
Mobeus will now be represented on the board and owns a 24 per cent stake, while the management owns 52 per cent.
Chief executive Alan Gaby said: “As well as providing a partial exit for Kevin, having Mobeus on board means that we have access to capital if we want to expand further.”
He said the deal had also provided windfalls for former and current staff who had share options.
He added: “It is an opportunity for the management team to take more of an interest in the business and to take it through the next phase.
“It was the best deal for all the stakeholders and means that we can continue with the same culture but benefit from having a stronger backer.”
Tessella is based at Abingdon Science Park and has three other offices in the UK, three in the USA and one in Holland. It was Oxfordshire’s only winner of a Queen’s Award for Innovation last year for a system called the Safety Deposit Box with The National Archives in London, to preserve digital information for posterity.
Mr Gaby said the system, now available via the internet, was being used by more than a dozen libraries worldwide.
Tessella saw turnover nosedive during 2009, but has since recovered, taking on 50 new staff last year and planning to recruit more this year.