IT advisory and managed services firm efex welcomes private equity investor
Private equity firm Advent Partners has claimed a majority stake in national IT advisory and managed services firm efex, itself built out of almost a dozen acquisitions since its founding.
Established in Sydney in 2013 by Nick Sheehan, who will continue on as CEO, efex has since grown to a headcount in excess of 250 employees across more than a dozen locations, most recently with the backing of another private equity firm, Alceon.
The fresh capital injection from Advent Partners, efex says, will now further fuel the consultancy’s regional expansion and growth through its existing ‘buy and build’ strategy, as well as help to develop new service offerings in line with evolving market demand.
“This is an exciting opportunity for the business and a signal of more good things to come for the thousands of customers we service,” Sheehan said. “We have significant ambitions, and by adding one of Australia’s most experienced investment managers to our corner, we are well-positioned to build on our success as a great home for other businesses looking to consolidate.”
With a focus on the mid-market and strong presence in regional Australia, efex claims a customer-base in the region of 7,500, including those in the professional services, education, healthcare, mining, and local government sectors. Another key attraction for Advent was said to be efex’s automation platform, which serves to enhance integration efficiency and scalability.
The new partners also pointed to a fast-growing Australian ICT managed services market for SMEs already worth an estimated $3 billion and projected to grow at an 8 percent clip per annum, driven in part by the ongoing data and cloud transition and ever increasing requirements as to cybersecurity risk and compliance, areas catered to by efex among a wide suite of services.
Bolstering that portfolio of offerings were the recent acquisitions of cybersecurity services firm Datcom and healthcare sector IT solutions provider Medihost, two of around a dozen purchases efex has made since its inception, including seven of those over the past four or so years following its 50 percent stake sold to Alceon for a tick under $30 million in 2021.
According to figures thrown up by the AFR, efex has since at least doubled and possibly increased its valuation fourfold to somewhere between $100 million to $200 million, and in its previous financial year generated revenues of almost $110 million.
“efex is a unique business, combining national scale with a genuine local connection, and is as an ideal partner to drive continued consolidation within the managed IT services sector,” said Advent’s Brad Lynch, with fellow partner Mark Jago adding, “As efex continues to scale, we are excited to support Nick and the team through our collaborative approach to help unlock new potential.”
Dealmakers
Known advisors on the sale to Advent Partners included MA Financial Group (Moelis), Corrs, and L.E.K. Consulting (strategic and commercial advisory).
