Data “pioneer” acquires £43m cloud company
A CLOUD services business with offices in Leeds has been sold to a US “pioneer” in the sector.
Investors Lyceum Capital have sold its stake in Adapt, which has offices in Leeds, London, Ipswich and Cardiff, to US company Datapipe.
Catalyst Corporate Finance advised the shareholders including Lyceum on the deal for an undisclosed sum.
Adapt has offices on Burley Road in Leeds and has been investing heavily in hybrid cloud capabilities. It says it specialises as an integrator, developing companies’ digital capabilities.
Revenues at the Adapt group of companies (registered as Adapt Holdco) dipped in the year to 30 June 2015, down to £43.2m compared to £50.1m the year before with a pre-tax loss of £14.7m.
Lyceum invested £13.1m in the group’s companies over the year. It first invested in Adapt in 2011 buying a majority stake for £30m.
It backed Stewart Smythe to deliver a “transformational” performance and Abny Partners, the lead investor in Datapipe, has tracked its progress since 2012.
Mr Smythe will stay on at the business and lead Datapipe’s European Operations.
Simon Hitchcock, Partner at Lyceum responsible for leading both the investment and exit from Adapt commented: “Our investment in Adapt five years ago allowed us to take full advantage of the high growth opportunities in the managed hosting market. We identified these opportunities in the sector early on, through our extensive market mapping activities.
“Since the acquisition, we have invested heavily into developing the business’ capability and growing it significantly by putting Lyceum’s buy and build model into action.
“The success of Adapt is just one example of how the UK has become a breeding ground for high growth businesses in the lower middle market.
Stewart Smythe, chief executive of Adapt: “Together with Lyceum we have achieved a phenomenal amount over a short space of time to truly transform Adapt into the market leader it is today. We have integrated three businesses to create a new high performing and customer-focused operation, building a talented management team, creating a new go-to-market and developing a professional sales organisation. Today Adapt’s unique Habitat offering provides market-leading hybrid and multi cloud services delivered from one integrated platform to support our customers’ mission-critical business applications. Coming together with Datapipe will accelerate our strategy to develop into a truly global business.”
Andy Currie, managing partner at Catalyst who led the deal supported by partner Jamie Hope, director Emmet Keating and Michael Mullally said: “This is a great example of private equity working in partnership with management to build a highly successful business and I am sure the business will go from strength-to-strength under its new ownership.”
