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By | Paul Kunert 14th May 2014 13:25

For-sale sign erected outside UK reseller titan Kelway's HQ

VC buyer expected to step in and snap up Core's tasty stake

Venture capitalists and prospective trade buyers will get the chance to take a look under the hood of London-based mega reseller Kelway this week – when investment bankers metaphorically drive the biz onto the forecourt.

US finance house William Blair is in charge of selling off Kelway. Our sources close to the company expect a hefty private-equity buyer will step in to hoover up a chunk of the reseller held by Core Capital.

It is also possible that a buyer will be found lurking from within the tech industry, but as we've already pointed out, Kelway's expanding waistline limits suitors to all but the largest.

An information memorandum is to be dispatched for consumption, in a process dubbed Project Kernel by William Blair, multiple sources have told The Channel. Kelway's top line has swollen since embarking on a buy-and-build strategy in 2006. Back then, the reseller was turning over £45m a year, and Core Capital coughed £5m to grab a 25 per cent stake of the biz.

Core upped its shareholding to 29 per cent in 2011 when it transferred the business to another fund; it's understood it now wants to cash in on what is its largest investment.

Execs at Kelway are also seeking an equity player to help them get to the £1bn turnover mark en route to an IPO, it's believed: it easily broke the £500m barrier in fiscal 2014, which ended 31 March, our sources say.

Acquisitions have included Elcom – bought from an administrator, Repton, Panacea Services, ISC Networks, SAM Practice, BSS and Equanet.

Kelway refused to comment on this story. ®

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