MSP Private Equity Funding: Abry Partners Invests In Options Technology
by Joe Panettieri • Jan 7, 2020
Private equity firm Abry Partners has invested in Options Technology, an MSP that offers managed cloud applications to financial services firms. Financial terms were not disclosed. Also, Abry Partners didn’t say whether the deal involved a majority or minority stake in the MSP.
This is M&A Deal Number 15 that ChannelE2E has covered in 2020. See the complete M&A deal list here.
Options will leverage the investment to “significantly accelerate its growth strategy, pursue strategic M&A targets, invest further in the firm’s technology platform and expand Options’ reach in key financial centers globally.”
Abry Partners Invests In Options: MSP and Private Equity Background
Options, founded in 1993 as a hedge fund technology services provider, now has close to 300 employees globally and offices across the United States, London, Belfast, Hong Kong, Singapore, Toronto, Dublin, Geneva and Auckland, the company said. Key customers include investment banks, hedge funds, funds of funds, proprietary trading firms, broker/dealers, private equity houses and exchanges.
Options’ intellectual property includes front-to-back office managed infrastructure, branded as Managed Platform, Managed Colocation, and Managed Applications.
Abry Partners, founded in 1989, has extensive experience investing in MSP companies. The private equity firm’s key holdings include NexusTek and a minority stake in Rackspace. The PE firm has completed more than $82 billion of leveraged transactions and other private equity or preferred equity placements. Abry currently manages $5 billion of capital across their active funds, the firm says.
Abry Partners Invests In Options: Executive Perspectives
Weighing in on the deal, Options President and CEO Danny Moore said:
“We are thrilled to announce Abry’s investment in Options. They are a firm with a proven track record in partnering with growth firms and propelling them to the next level. Even more crucially, they are seasoned operators in the financial services and Managed IT space and understand the exciting opportunities within reach of firms offering cloud services to the capital markets sector. We look forward to working with Abry as we continue to lead the market in the delivery of complex IT infrastructure, colocation services and specialized financial applications.”
Added Tomer Yosef-Or, a partner at Abry:
“We are excited to be able to help the Options team accelerate their efforts to become one of the leading Managed Service Providers globally. Abry believes the ever-changing IT landscape will provide multiple opportunities for Options to continue to expand its services and strengthen its strong partnerships with customers. We intend to leverage our significant capital and experience in the IT infrastructure and managed services space to help the Options team build a highly sophisticated, customer centric, global platform.”
Private Equity Firms and MSPs: The Background
Dozens of private equity firms have been acquiring MSPs. The deals often include long-term rollups and geographic expansions to gain scale, recurring revenue and margin expansion.
Deal activity in the financial services vertical has been particularly hot. Example deals include:
- November 2019: Coretelligent, backed by private equity firm VSS, acquires SoundView IT Solutions, an MSP for hedge funds & financial services firms.
- July 2019: Thrive acquired Tier1Net. Thrive is backed by M/C Partners.
- February 2019: Abacus Group acquired Proactive Technologies. Abacus is backed by WestView Capital Partners, a Boston-based private equity firm.
- June 2018: H.I.G. Capital invested in Eze Castle in June 2018. At the time, Eze Castle claimed to have more than 650 alternative investment and financial sector customers around the world.
More M&A deals and private equity investments are a safe bet. Indeed, private equity investors are sitting on a record $1.5 trillion in cash, according to new data from Preqin. Yes, that’s trillion — with a T. That is the highest on record and more than double what it was five years ago, CNBC reports. Amid that reality, private equity firms are scrambling to make investments.