Evolution Capital advised the shareholders of Insite, Europe’s top provider of Microsoft Dynamics AX hosting and managed services in the cloud, on the sale of the company to Six Degrees (6DG) in May 2016. 

BACKGROUND

Insite was launched in 1994 and specialised in hosting and managing business-critical applications based on Microsoft cloud technologies. It was a highly successful and profitable business with significant recurring and contracted revenues in an exciting and rapidly expanding sector. 

The company owns and operates its own tier 3 aligned data centre where it hosts private cloud infrastructure, dedicated to each client, upon which it builds tailored platforms to operate ERP and CRM platforms, predominantly but not exclusively for Microsoft applications.

Insite is a Microsoft Gold Partner for Server and Data platforms, plus Hosting, bringing critical Microsoft Azure public cloud knowledge to 6DG. Heavily focussed on application uptime, Insite includes application performance monitoring, highly pro-active support and robust security controls within its service wrapper. End-users include Greenwich Leisure Limited, Tarmac Building Products, Crew Clothing, Joules and Countrywide Farmers.

In addition to the well documented continuing growth in the cloud market, the company’s client base and know-how represents a serious growth opportunity for buyers with large client bases for cross-selling. 

THE CHALLENGE

After 20 years of growing the business, founder and MD James Barden was keen to explore a sale of the business in order to pursue other interests. 

Evolution Capital identified, via a strategic review, the business had a proven model and would be extremely valuable to large players. 

Whilst the company was likely to continue its targeted growth profile within its current parameters, a more aggressive sales-led strategy would yield even more success and value. 

Insite employed Evolution Capital to find a suitable buyer for the business. 

ADVICE, PLANNING AND PREPARATION

The Evolution Capital team developed a sales proposition based on commercial information provided by company. The key aspects of the business are: 

  • Extremely profitable, cash generative growing business with an impressive financial track record
  • Highly efficient operation focused on market leading service delivery and client retention.
  • Highly skilled and loyal workforce 
  • State-of-the art data centre equipped with the latest and highest quality IT infrastructure
  • Market leader and specialist in its field
  • Strong corporate focus with high value, premium and long term contracts of between three and five years
  • Excellent and steadily expanding client base with a superb retention rate
  • Outstanding service delivery and customer reputation

FINDING THE RIGHT BUYER 

Evolution Capital prides itself on knowing most of the key buyers in the TMT sector; a network that has been developed over two decades advising on deals within the industry. 

It identified and approached a number of potential buyers on behalf of Insite and negotiations were instigated. Interest in Insite was high resulting in a number of offers being put forward for consideration. 

A SUCCESSFUL OUTCOME

Insite agreed to a private sale of 100% of the entire issued share capital of the trading business to managed services provider 6DG in May 2016 for an undisclosed sum.  

With customers spanning both private and public sectors, Insite brought critical Microsoft Azure public cloud knowledge to 6DG.

Alastair Mills, the then CEO of Six Degrees, commented: “This announcement is a continuation of our stated strategic goal to enhance our capabilities in mission-critical application hosting, with a secure and compliant wrap, for business and government customers. It also provides Microsoft Azure expertise in the public cloud for both IaaS and PaaS, as well as a strong ISV partner channel.”

James Barden, MD of Insite, added: “The Insite team is excited about the opportunity this combination presents. The technical capabilities of both businesses are highly complementary and our approach to the way we work with customers is a very close fit. We are looking forward to introducing new capabilities from Six Degrees in addition to the expertise in mission-critical hosting we have been delivering to our customers for many years.”

 

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