Catalyst advises Adapt on sale to US-based Datapipe

Catalyst Corporate Finance acted as lead advisor to the shareholders, including Lyceum Capital, on the sale of Adapt, the award-winning managed infrastructure services provider and cloud integrator. The company has been sold to Datapipe, a US-based pioneer of managed services for private, public and hybrid cloud platforms.

Adapt is a leading UK managed cloud services provider and integrator enabling customers’ digital evolution. The business takes a transformative, application-led approach to cloud that makes it easier for customers to change and innovate securely. Specialising 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 first invested in Adapt in September 2011, acquiring a majority stake in a £30 million transaction. Lyceum had a clear vision and transformational strategy for the business and backed new Chief Executive Stewart Smythe to deliver it. Under Lyceum’s ownership and Stewart’s leadership, Adapt has successfully transformed from a reseller of data centre colocation and connectivity into a high growth managed hosting provider and cloud integrator for business critical applications. Headquartered in London, the business has operations in Cardiff, Ipswich and Leeds.

Datapipe is recognised as the pioneer of managed services for public cloud platforms. Gartner recently named Datapipe as a leader in the Magic Quadrant for Cloud-Enabled Managed Hosting and Abry Partners, the lead investor in Datapipe, has tracked Adapt’s transformation since 2012. As part of the sale, Stewart Smythe will remain with 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’s capability and growing it significantly by putting Lyceum’s buy and build model into action. Our deep understanding of the IT managed services market coupled with the management team’s expertise, have helped Adapt to become a market leader in its niche. 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, and confirms Lyceum’s track record as a value adding technology investor."

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. This is the sixth deal Catalyst has completed since the EU referendum and is our fourth international deal in this period. We remain positive that any uncertainty created by the terms of the UK’s exit from the EU will not prevent deals being done as there will continue to be appetite from investors for high quality businesses such as Adapt."

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