Status:

Realised

Commitment:

£30m

Date of investment / realisation:

2011 / 2016

Sector:

Technology Services

Buy & Build:

3 completed acquisitions

“The partnership equipped us to increase our presence in the IT value chain and complete important M&A transactions.”

Stewart SmytheCEO, Adapt

Background

Horizon Capital identified a growing use of private cloud hosting and the emergence of hyperscale hosting driving organic growth in IT Managed Services business. We also identified a clear opportunity to consolidate what was a highly fragmented and principally owner managed market. Following extensive market mapping over 24 months during which we held transaction dialogue with a number of potential platform investments we concluded a transaction with the founder of Adapt in 2011. 

The Journey so far

On acquisition we appointed Stewart Smythe as CEO and Phil Male as Chairman both of whom we are working with again in our current portfolio company Ascent.  Together with them we developed a detailed strategy for the business and market consolidation.

Over the five years of our investment Adapt grew organically using Adapt as a platform.

Buy and Build

Adapts M&A strategy was focussed on building scale in the cloud hosting business and on entering the hyperscale hosting market. During our investment we completed two acquisitions which made Adapt one of the largest enterprise managed hosting businesses and one team acquisition to enter the high growth Hyperscale market.

Realisation

Early on in our investment cycle we identified the market trends in the United States were 2-3 years ahead of the UK. Together with Stewart Smythe we invested time to understand the developments in the US market and built a network of contacts in US competitors.  These relationships developed over three years, informing our growth strategy and led to the successful realisation of Adapt in 2015 to a US private equity backed consolidator who wanted to enter the European market.  During our ownership revenue grew 41% and EBIDTA 172% and we realised a return of 3.2x our capital invested.

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