The reason why Lyceum-backed Adapt remains Lyceum-backed is contained in their latest set of annual profit and loss accounts - company growth stalled and so a sales process was halted.
The London-based outfit was expected to come onto the market last last year and tasked M&A and corporate finance advisor ARMA Partners with managing an auction of sorts. Then things went quiet. No Information Memorandum has yet been sent to prospective buyers.
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Every biz owner wants to put their best foot forward when seeking external investment or a buyer, and Adapt had the marks that is still transitioning from a co-location provider to a cloud/managed services outfit in the year ended 30 June 2015.
Turnover for the 12 months fell 13.56 per cent on the prior fiscal to £43.27m. The firm said the drop came after it “gracefully disengaged from some legacy contracts” in data centres services.
Managed cloud services is a target area for Adapt: it launched the Habitat hybrid cloud “platform” launched in mid-2014 and even managed to snare a couple of customers in fiscal ’15, including the Cabinet Office. MCS sales were up six per cent in the year to £20.3m.
Adapt was slurped by private equity firm Lyceum for £30m in 2011, but since then it has itself bought infrastructure outsourcing biz eLINIA (2012) and cloud hosting provider Sleek (2013).
A resulting richer revenue mix showed up in the fiscal ’15 numbers, with gross profit margin edging up to 52 per cent from 44 per cent.
Gross profit was some £400,000 higher than the previous year, taking the haul to £22.6m but this good work was more than unpicked by a ten per cent spike in admin expenses to £28.17m, which left operating losses at £5.56m, versus a loss of £3.48m in the prior year.
Admin expenses included exceptional costs of £3.8m related to exiting some supply contracts, data centre leases and redundancy.
Debts of £33m - two loans - cost Adapt £9.09m to service in the year, which widened pre-tax losses to £13.7m versus £10.02m.
Sources told us they expect the business to come onto the market this year, a little later than initially planned.
Adapt was not available to comment. ®