Performanta deal proves private equities can't get enough of MSPs and MSSPs in 2021
Beech Tree Private Equity invests in Berkshire-based MSSP Performanta
Berkshire-based MSSP Performanta has become the latest in a string of managed services providers to take on private equity investment in 2021, selling an undisclosed stake to Beech Tree Private Equity.
Founded in 2010, Check Point Platinum partner Performanta has over 140 staff globally in offices in the UK, Australia, Germany, South Africa and the US.
The influx of private equity money into the MSP sector has accelerated in 2021 as investors gravitate towards the high growth, high margins and high recurring revenues inherent in the model in the wake of the pandemic.
Possible hikes in capital gains tax are also forcing some owners to seek a quick exit, other commentators have noted.
This is at least the seventh platform acquisition of a UK MSP by a private equity house in 2021, and at least the fifth deal announced in March alone. Already this month, SAP partner Codestone, network services and security specialist Phoenix Datacom and Cisco Gold partner Systal have all taken on private equity backing, while Node4 has changed private equity partners.
Beech Tree itself already has at least three other resellers and MSPs in its portfolio, namely BCN, Wavenet and Transparity.
Investing between £10m and £40m in its charges, it caters for MBOs, cash-out deals, M&A funding and expansion capital. It claims every business in its current portfolio has made at least one acquisition.
Based in Maidenhead, Performanta provides managed cyber security services to enterprise customers.
Beech Tree will support Performanta's plans to "scale up rapidly", the duo said, investing in its flagship ‘CORE' product and making strategic acquisitions.
As part of the deal, Performanta has appointed a new group chief revenue officer and CFO and also welcomed on board two Beech Tree execs as non-executive directors.
Discussing the rationale for the investment, Beech Tree held up research predicting that the global cybersecurity market will grow from $173bn to $270bn by 2026, with 77 per cent of spending by 2026 focused on outsourced managed security services.
"The market is experiencing significant growth as cyber-attacks become more high profile, frequent and damaging, which is driving the increased requirement for specialist managed cyber security services," said Adam Rudd, Director at Beech Tree.
"We have been particularly impressed with the depth of cybersecurity expertise demonstrated by Performanta, which is reflected by its tier one customer base, including businesses with global operations across banking, aviation, financial services, insurance, telecommunications, public sector and blue-chip enterprises. We are delighted to partner with the team and look forward to supporting their next phase of growth."