Acquisition creates leading independent IT managed services provider to mid sized corporates with combined sales of £50 million

Lyceum Capital portfolio company Adapt, the independent IT managed services provider, has acquired its first add-on business eLINIA, a leading provider of cloud computing and infrastructure outsourcing, in a £13 million transaction.

Backed by Lyceum in September 2011, Adapt delivers enterprise-class cloud, infrastructure management and data centre services to a wide range of mid-market clients that operate business critical IT applications, including Last.fm, LOVEFiLM and LCH.Clearnet.

Since Lyceum’s £30 million investment, the company has appointed Stewart Smythe, a highly experienced IT services executive, as CEO, successfully developed new channel partnerships and further developed its managed services proposition.

eLINIA, which is one of the UK’s fastest growing IT solutions providers, becomes the first add-on as part of Lyceum and management’s combined organic and buy-and-build growth strategy. The acquisition was sourced by Lyceum’s Origination team.

Based in Cardiff, eLINIA was founded in 2004 and, and is recognised for delivering extremely high quality, high security services and premium managed services solutions under three to five year contracts to a range of mid-market UK corporates with customers across a range of industries. The business, which has 65 employees and is highly focused on customer service, recorded sales of over £10 million for the year ended January 2012.

The acquisition takes the turnover of the enlarged group to approximately £50 million and adds to Adapt’s capabilities in the provision of best-in-class ‘IT Infrastructure as a Service’ solutions through its award-winning Enterprise Virtual Data Centre (eVDC). The deal also provides the business with a high quality operational centre in Cardiff.

John Jones and Justin Lewis, Managing Director and Operations Director of eLINIA respectively, will join the main board of Adapt.

Lyceum Partner Simon Hitchcock, who joined Adapt’s board following the firm’s investment in September 2011, led the deal, supported by Investment Executive Martin Squier.

Simon Hitchcock said: “As a premium managed services business with an enviable growth track record and a strong UK footprint of clients across the mid-market segments, eLINIA represents an excellent strategic fit for Adapt.

“This first add on encapsulates our acquisition strategy for the business, which is geared towards broadening its managed services and cloud-based proposition by building on its existing eVDC platform, to create the UK’s leading Infrastructure as a Service provider to mid sized corporates. It also further strengthens the management team, which has the expertise, vision and experience to ensure the business achieves its full potential.

“Our Origination team continues to identify further value generating acquisitions for the company in the fragmented managed IT services sector, which is undergoing significant growth driven by UK plc’s continued appetite for IT and communications rationalisation in the low growth environment, realised through outsourced and managed contracts.”

Stewart Smythe, CEO of Adapt, commented: “Our ongoing strategy is focused on becoming the UK’s go-to provider of pure play managed IT services and this acquisition will give us the scale, strength and breadth of offering to accelerate this journey.

“eLINIA is a small but perfectly formed premium infrastructure outsourcing business, renowned for its commitment to quality, security and customer focus. Together we’re going to make something pretty special happen in the market as we look to grow our business dramatically over the next two to three years.”