A leading managed IT services provider, Adapt, is set to execute a buy-and-build strategy to capitalise on market opportunities after securing backing from growth investor Lyceum Capital.

Adapt delivers enterprise-class cloud, infrastructure management, network and data centre services to a wide range of mid- market clients that operate business critical IT applications.

It serves a broad client base, many of which are fast growth businesses including PKR, Cubic Transportation, Last.fm, LOVEFiLM and LCH.Clearnet.

Established in 2001, Adapt has developed into a £35 million turnover business with current EBITDA of £3.9 million. The business is headquartered in central London and employs over 100 people.

Lyceum is backing a new Chief Executive who will join the business in the new year from a global managed services provider, following the expiry of his notice period. He will join the existing Sales Director Simon Fisk and current MD Robert Arrowsmith, who will become M&A Director. Mark Woodall also joins the team as the new Finance Director, having most recently been interim Finance Director of a private equity-backed IT managed services provider.

Peter Knight, Adapt’s founder, will remain on the Board in a non-executive capacity and has reinvested alongside Lyceum. The deal, led by Simon Hitchcock and Humphrey Baker of Lyceum Capital will see Simon Hitchcock and David Harland of Lyceum joining the board.

The transaction represents a successful exit for Alcuin Capital who have been investors in Adapt since 2006, when they backed an MBO led by Peter Knight.

The market for Adapt’s services is growing rapidly and managed hosting and cloud services, Adapt’s core addressable market, is expected to grow at a CAGR of approximately 15 per cent over the next five years.

With Lyceum Capital’s strategic support and funding, management will implement an expansion strategy focused on organic and acquisitive growth.

Through further penetration of Adapt’s existing client base and development of channel partner relationships, the firm aims to become the leading IT Infrastructure as a Service business to UK SMEs and mid-sized corporates.

Adapt’s acquisition plan will create scale and broaden its managed services and cloud based proposition, as well as allowing the company to expand its service across the UK.

Simon Hitchcock, Partner at Lyceum Capital, said: “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.”

Simon Fisk, Adapt’s Sales & Marketing Director, comments: “As a result of this 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.”

Robert Arrowsmith, M&A Director at Adapt, added “Lyceum Capital has a proven track record in supporting rapid business growth through acquisition. This partnership renders us well-equipped to increase our presence as an essential player in UK mid-market IT value chain and to complete a number of key M&A transactions.”

This transaction follows Lyceum’s platform investment in food retailer EAT and its £50 million investment in Access, a SaaS based accounting and ERP software and services business, both of which completed in March this year.