Great Hill Partners has acquired majority control of Evolve IP, a fast-growth cloud services provider (CSP) in Wayne, Pa. Great Hill is a middle-market growth-oriented private equity firm. Evolve IP will use the capital to accelerate its growth plans, including potential acquisitions. In addition to base funding (an undisclosed figure), the deal includes $100 million for potential acquisitions, the companies confirmed.
Evolve IP is no stranger to the M&A market. As of December 2015, the company had acquired at least seven IT service providers -- including a managed IT service provider focused on the veterinary medicine and pharmaceuticals verticals.
Backed by Great Hill Partners' cash, it sounds like Evolve IP will ramp up for more acquisitions. "With this investment, we will have the opportunity to accelerate our growth, organically and via acquisitions, much more quickly than we could have as a closely held company," said Thomas J. Gravina, chairman, CEO and co-founder of Evolve IP.
Although financial terms weren't publicly disclosed, both Evolve IP and Great Hill Partners leveraged expert advisors on the deal.
- PJT Partners served as financial advisor and Cozen O'Connor and Wachtell, Lipton, Rosen & Katz served as legal advisors to Evolve IP.
- Choate Hall & Stewart served as legal advisor to Great Hill Partners.
Evolve IP's Past, Present, Future
Founded in 2007, Evolve IP's services now support more than 1,300 commercial businesses and over 100,000 users across four continents and 15 countries, the company said. Among Evolve IP's key differentiators: The Compliance Cloud, which supports standards and compliance mandates like ITAR and FedRAMP (for the government sector) and HIPAA (in healthcare). The company also works closely with Cisco, EMC, VMware, Microsoft and Polycom.
In addition to making more acquisitions, Evolve IP's growth strategy includes new services, new hires, expanding into new geographies, and extending its partner program. The partner program will increasingly focus on value added resellers, direct market resellers and master channel partners, Evolve IP said.
Private Equity for MSPs, CSPs
A growing number of VARs, MSPs and CSPs now leverage private equity backing to accelerate their growth. In addition to Great Hill supporting Evolve IP, key examples include:
- Clearlake Capital Group in 2015 buying Pomeroy and merging it with Tolt Solutions, an IT solutions provider focused on retailers.
- Court Square Capital Partners in 2015 acquiring AHEAD — a major IT solution provider based in Chicago.
- Sverica Capital Management in 2015 acquiring Synoptek, a well-known managed services provider (MSP) that has offices in California, Colorado and Idaho. Synoptek CEO Tim Britt explained the company's growth strategy in ChannelE2E Podcast 064.
- Apollo Global Management in 2014 acquired Presidio, a massive Cisco, EMC and VMware channel partner that has morphed to offer managed hybrid cloud services. Presidio, in turn, has made multiple acquisitions.
We've reached out to Evolve IP for additional comment about the Great Hill deal. Stay tuned.
