Great Hill Partners, Boston, has bought a majority stake in Evolve IP, a ten-year-old Wayne-based cloud-computing pioneer. Founding CEO Thomas Gravina and partner Michael Peterson will remain directors, and Gravina will use Great Hill backing to "accelerate mergers and acquisition," Gravina told me.
Buyer and seller wouldn't name a price, but Great Hill says it's investing and borrowing more than $100 million so Gravina can expand Evolve IP through acquisitions. Great Hill says it invests at least $25 million in each firm it backs, such as online linens retailer Wayfair.com, RxBenefits, SheKnows Media and YogaWorks.
"Nothing's going to change" -- except that "we are definitely going to grow faster," Gravina said. "We think the next five years in the cloud gives us opportunities for significant growth. And we are going to grow this company in a material way." Evolve IP currently employs around 200, nearly 150 of those in the Philadelphia area, at the firm's Wayne headquarters and its year-old network operations center at 401 N. Broad St. in Philadelphia, the rest at offices in Austin, Cleveland and other cities.
"We're going to hire and acquire at least 50 positions over the next 12 to 15 months," in sales, marketing, engineering and support, Gravina added. "The workforce in five years will more than double." Evolve IP has already absorbed seven smaller firms, accounting for about 15 percent of current revenues. Buying larger firms "is what I am going to focus my energies on. The operations of this company are already at a very high level."
In a statement, Evolve IP said it also plans to use Great Hill's backing "to expand and enhance its national distribution channels, including Value Added Resellers, Direct Market Resellers and Master Channel Partners." The company provides virtual servers, disaster recovery, IP telephony, unified communications (Internet-phone-data) and contact centers -- the cost-saving, cloud-based next-generation versions of the remote and reliability physical server-based services pioneered by SunGard Data Systems, also based in Wayne.
Evolve IP boasts 1,300 business clients using its licensed products in 15 countries. Vendor certs include Cisco CMSP Master for IaaS, DRaaS and DaaS; SSAE 16; EMC CSP; VMware VSPP (IaaS and DaaS); Microsoft CSP, Mobility and SCA; Polycom Platinum.
"Great Hill Partners is well-aligned with our vision," said Peterson in a statement. "With this transaction, Evolve IP will have the resources available to take the Company to a new level, enabling us to scale the enterprise significantly through both organic growth and substantial acquisition capital."
Evolve IP is Great Hill's first cloud investment. The cloud, which serves corporate computer networks and their smartphone users from multi-user remote server banks, cheaper than running a corporate network, "has now grown to become one of the fastest growing technology sectors," and Evolve IP is "a clear leader," said Christopher S. Gaffney, managing partner at Great Hill, in a statement. Besides buying control, "we have reserved and arranged more than $100 million of additional equity and debt capital for a substantial acquisition strategy, to leverage Evolve IP's leading position in the industry."