Specialist-tech investor Volpi Capital has made its first investment from fund III by acquiring UK-based cybersecurity group Xalient.
Volpi Capital Fund III was registered in May 2022 and is still in the early stages of fundraising, Scott Fairlie, who sits on Volpi's investment committee after recently joining from Synova, told Unquote.
"It was an incredibly competitive process," said Fairlie. "If I was going to coin why we won, it’s that we’re a specialised tech fund which gave us the edge.
"The people we beat were typically generalists, but the team knew that we understood the market, the opportunities and the challenges,” he added.
The fund's predecessor, Volpi Capital Fund II, held a final in January 2021 at EUR 323m.
Privately-owned Xalient tapped Houlihan Lokey to run a process earlier in the summer, marketed off GBP 3m EBITDA, as reported by Unquote's sister publication Mergermarket.
The bank approached around ten mid-market private equity sponsors, including Livingbridge, NorthEdge Capital and Maven Capital Partners, as reported.
Volpi acquired the business all equity.
"It’s a niche provider," said Fairlie. "There are very few independent assets of this size and we’re going to continue to back the business platform by expanding internationally and buying complementary assets."
Xalient, which offers IT consulting and cybersecurity services, has revenues split 50/50 between the UK and US, and has seen annual growth of around 30%.
The acquisition plan includes doubling down on M&A in the UK and the US to add more capabilities in cybersecurity, identity and access, and SD-WAN.
Xalient helps large corporations secure and rapidly migrate their networks to the cloud using cutting-edge technologies. It benefits from a global client base, notably in the US where it has a growing footprint. Its blue-chip clients include Kellogg’s, Keurig Dr Pepper, WPP, and Avis Budget Group.
Volpi – Scott Fairlie (member of investment committee).
Xalient – Sherry Vaswani (CEO); Mark Cooke (COO).
Volpi – KPMG (financial and tax DD); Osborne Clarke (legal); RSM (structuring); Altman Solon (commercial DD); and Marsh (W&I insurance).
Xalient – Houlihan Lokey (corporate finance); Mishcon de Reya (legal); PwC (financial DD); and EY Parthenon (commercial DD).
GP installs former Atos CEO as chairman; deal is partial exit for Apax Partners' India-based Healthium
Fund’s recent focus has been senior secured deals for companies seeking financing amid a tough credit market
Direct private equity co-heads Thomas Vatier and Jay Takefman on the firm’s family roots and its approach to the current market
Triton will exit German web hosting provider after growing revenues to EUR 120m from EUR 2m