IT services provider Adapt has completed a £30 million deal as it sets off on a buy-and-build strategy.
IT services provider Adapt has completed a £30 million deal as it sets off on a buy-and-build strategy.
The deal, with Lyceum Capital, achieves an exit for Alcuin Capital which backed an MBO of the company, led by company founder Peter Knight, in 2006.
As part of the deal with Adapt, which provides cloud, infrastructure management, network and data centre services to mid-market clients, the business will receive a new chief executive who will join the business in the new year. Its clients include PKR, Last.fm and LOVEFiLM.
In a recent study conducted by Lyceum Capital, the growth investor found that of 22 private equity controlled deals in the lower mid-market competed during the third quarter of 2011, eight have been in the TMT sector.
Existing sales director Simon Fisk will remain with the business and managing director Robert Arrowsmith will become M&A director.
Simon Hitchcock, partner at Lyceum Capital, comments: The growing Infrastructure as a Service market is highly fragmented with a large number of attractive fast growth businesses.
‘There are only a small number of businesses in the market that have Adapt’s scale as well as an operational virtual platform that supports a growing number of clients. Adapt has invested heavily in this and we believe it is well placed in the most attractive area of the IT managed services sector.’
The deal with Adapt follows Lyceum’s investment in food retailer EAT and £50 million transaction with Access.
Arrowsmith says that the new partnership means Adapt are now ‘well-equipped’ to increase its presence in the UK mid-market IT value chain. He adds that a number of ‘key’ M&A transactions will follow the deal.
Company founder Knight is to remain on the board in a non-executive role and has reinvested alongside Lyceum.
Fisk comments: ‘As a result of the deal we are in a strong position to continue to capitalise on the increasing propensity of organisations to outsource their IT infrastructure through an organic and acquisitive expansion strategy.’
