Adapt IT M&A offers new opportunities for software businesses

Adapt IT is both an acquirer and operator of its acquired companies.

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Adapt IT is a South Africa-based global specialist software and services organisation with M&A at the core of its DNA and a track record of 17 acquisitions in as many years. The company was acquired in 2022 by the Volaris Group – a subsidiary of Constellation Software (TSX:CSU) – the latter being a Canadian listed provider of leading vertical market software to 100+ industries in 150+ countries across both the public and private sectors.

With an expanded CEO-led M&A team in place, we seek to acquire software businesses to expand our offerings to customers globally. Adapt IT is looking for vertical market software companies that have built specialised software solutions with a strong and a highly-engaged customer base.

People are at the heart of our business. Our focus is providing an alternative exit strategy by way of acquisitions by a reliable, stable and transparent partner. However, our differentiator is that our acquired companies operate in a decentralised and autonomous manner, which enables our businesses to retain their entrepreneurial spirit and company culture while having the safety, flexibility and credibility of a larger parent organisation.

We have a vision of long-term, sustainable growth, with best practices, peer-learning and the capital to achieve continuous improvements. Adapt IT is both an acquirer and operator of its acquired companies; in addition to acquiring the businesses, we look to strengthen and grow them. Our promise is to hold onto our acquisitions forever. We never sell the companies we buy. This is a lifelong journey.

• For a software business founder or owner

We work with an acquired entity’s management, respecting the company’s history and IP, and engage with owners to collaboratively to accelerate achievement of the business strategic goals. In this way, we empower business owners to preserve their legacy, achieve growth while continuing to safeguard company culture, serving the best interests of customers and continuing to reinvest in the products.

We support independence and decentralisation with accountability. We trust our business leaders and empower them to continue operating autonomously, while also benefiting from the financial stability and best practices of our parent company, Constellation Software, which has been refined over 25+ years.

We measure all our businesses uniformly around the world, which means all acquired businesses and their leaders are accountable to their KPIs irrespective of industry, trends and region. We entrust the teams and their irreplaceable in-depth knowledge of the market to determine how they achieve their strategic goals.

• For professional managers and management teams

Successful professional managers typically boast many years of experience growing companies and may have achieved their personal milestones along the way. However, it may be time to take the current operation to greater heights or shift careers up a gear. Either can be achieved by a move to a global milieu and exposure to the opportunities yielded via access to a network of proven business expertise and international experience, all augmented by a culture of mentorship and peer learning across a global peer network. Adapt IT offers this and more to professional managers – we provide a solid path to development through access to the wealth of knowledge that exists in the wider organisation.

• For M&A and corporate finance advisors

Adapt IT is a highly motivated acquirer seeking to continue expanding its suite of products and offerings, and well-positioned to engage and execute a transaction in a timely manner. We are looking to work with corporate finance advisors and M&A professionals across various geographies and verticals. We are open to having an introductory conversation at any time.

With in-house M&A, finance, operations, legal and integration teams, Adapt IT is committed in its engagement, process and timeline to put our best offer forward to close. We have streamlined our processes and timelines after refining them over the years, with checklists and check-in milestones, which make the most of interactions and ensure both parties are on the same page at each step.

Adapt IT’s acquisition activities are focused on Africa, mainly in mature markets such as South Africa, Kenya, Egypt, Nigeria and beyond Africa, the Middle East. However, the opportunity is not limited to these regions. Our targets are established businesses with their own IP software or technology offering in highly niche markets. We are looking for organisations where being deeply entrenched with customers and a high degree of specialisation are their unique differentiator.

We concentrate on vertical market software because these companies solve specific industry problems and are in tune with their customers. As a result, these businesses can adapt to market conditions much quicker than companies operating in horizontal sectors.

There is no upper limit on company size we look for as long as most of the business’s revenue is generated primarily from the software.

Our acquisition thesis is to acquire 100% – we do not acquire minority or majority stakes. This approach reflects our full commitment to the acquired business as we strive to achieve alignment on vision, strategy and execution from management.

We are open to exploring transaction options such as looking at non-core assets, disposals and carveouts of software divisions and tech units. This reflects our positive approach to achieving the right outcome from discussions with a potential seller, from the outset, as the commencement of a lifelong journey for both parties.

We are interested in talking to companies at various stages; however, acquisition by Adapt IT adds the most value to companies that have reached maturity and are ready for the next phase of growth. This also holds true for owners or management teams seeking liquidity options.

With headquarters in Johannesburg, South Africa, Adapt IT is a truly global company, servicing more than 10 000 customers in 55 countries around the world. Our experience in pan-African markets means we are well versed in the business realities of these markets.

Being part of Adapt IT gives acquired businesses global best practices, a worldwide peer network and market access – through an ecosystem of international software companies that offers both acquired entities and their leaders access to thousands of like-minded peers they can engage with to explore joint opportunities.

Adapt IT presents career development opportunities for employees and for owners who decide to remain with the company post-acquisition. Through our global operations, exciting professional growth opportunities can be available. Many of our leaders today have been in your seat once, learning the conversation from the perspective of the seller. However, if there are plans for management of an acquired business to retire or exit, we will work with them to identify an internal successor or recruit one.

Stephanie Laws, M&A Corporate Development Executive at Adapt IT.

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Adapt IT welcomes outreach by company owners/founders or management teams, their sell-side advisors and third parties with target suggestions or a brief conversation. Whether it be to learn more about our acquisition thesis and process or timeline, to discuss how to prepare a business for the M&A process, or simply to learn more about what can be expected from the process, a member of the Adapt IT M&A team is always happy to connect.

Stephanie Laws is a seasoned Corporate Development Executive with seven years' M&A and corporate development experience in various industries across North America, Europe and Africa. Laws leads engagements and strategic acquisition conversations when founders and/or management teams are exploring their next phase of growth. In addition to engaging with the management team, she is keen to cultivate long-term relationships with M&A corporate advisors for when the time is right to further these conversations.

To learn more about Adapt IT’s acquisition criteria, visit us at https://www.adaptit.com/acquisitions, or use the following links to book a meeting: acquisitions@adaptit.com or https://calendly.com/stephanie-l-ma. A member of our experienced M&A team will be in touch soon.