Adapt is an award-winning managed cloud services provider and integrator whose services facilitate their customers’ digital evolution. The business takes a transformative, application-led approach and specialises in agile hybrid solutions that deliver the best of public and private cloud as a single service. Adapt serves a wide range of organisations including Greencore Group, The Cabinet Office, Interflora and Steinhoff.
Lyceum Capital invested in Adapt in September 2011 and, together with new Chief Executive Stewart Smythe, transformed the business from a reseller of data centre colocation and connectivity into a high growth managed hosting provider and cloud integrator for business critical applications.
Abry Partners, the lead investor in Datapipe, had tracked Adapt’s transformation since 2012 and made a formal approach for the business in early 2016. We were asked by the shareholders to support them given our sector knowledge, track record in managing unsolicited approaches and maintaining confidentiality.
What difference did we make?
The first task was to understand Adapt in detail and assess readiness for sale. We carried out a detailed review of the business, focusing on the robustness of financial information and establishing the key value drivers to be articulated to the buyer. We worked with management to put forward a compelling strategic growth plan supported by detailed financial information that successfully elicited a competitive offer.
Before offer stage, we focused on striking a balance between providing sufficient information to suitably enhance the buyer’s confidence, enabling them to submit an attractive, deliverable offer whilst respecting the commercial sensitivity of sharing business information.
We entered into discussions to agree detailed Heads of Terms, ensuring that there was little room for manoeuvre and granted a short period of exclusivity linked to achievement of key milestones.
Our knowledge of US buyer behaviour meant that we anticipated areas of potential difficulty and ensured these were addressed early and appropriate seller conditions were reflected in both the initial and final offer.
We achieved an attractive valuation, completing the sale four weeks after the UK EU referendum, demonstrating the value of detailed business preparation and a well-tailored deal strategy.
Partner, Lyceum Capital