Target Information

EQT Mid-Market Asia III has finalized an agreement to sell Nexon Asia Pacific, a digital and IT services provider based in Sydney, to Adamantem Capital. Established in 2000, Nexon specializes in delivering comprehensive IT solutions tailored for mid-market and enterprise clients, demonstrating significant proficiency in security, cloud computing, and digital services. Under EQT's investment since 2019, Nexon has experienced remarkable growth, achieving over five-fold revenue increase, expanding its workforce from 150 to over 600 employees, and growing its clientele to over 1,000 organizations across Australia.

The company's transformation has been spearheaded by Founder and CEO Barry Assaf, who strategically combined organic growth with eight strategic acquisitions, enhancing Nexon’s service capabilities. Notable acquisitions include Liveware Solutions, Veridian Solutions, Equate Technologies, and Computer Systems Australia, all contributing significantly to the company's robust portfolio.

Industry Overview

The Australian IT services industry has witnessed substantial growth, driven by an increasing demand for digital transformation and technology adoption among businesses. The convergence of technologies such as cloud computing, cybersecurity, and artificial intelligence has propelled IT service providers to innovate continually and adapt to the evolving needs of a diverse clientele. With a strong market presence, Nexon stands at the forefront of this dynamic landscape.

In recent years, the Australian government has also recognized the importance of enhancing digital infrastructure. Initiatives aimed at fostering innovation, improving cybersecurity, and facilitating a smoother digital transition for businesses reflect a commitment to positioning Australia as a leader in the global IT services market. This supportive environment has allowed companies like Nexon to thrive and deliver value to their clients.

Moreover, the increase in remote work and digital services necessitated by the COVID-19 pandemic has accelerated the demand for reliable IT service providers. As organizations prioritize cybersecurity and cloud solutions, Nexon has effectively positioned itself to meet these needs, thus solidifying its relevance in this rapidly transforming industry.

Overall, the convergence of government initiatives, market demand, and technological advancements in Australia creates a favorable landscape for IT service providers, establishing a promising future outlook for companies like Nexon.

Rationale Behind the Deal

The strategic sale of Nexon to Adamantem Capital is aligned with both the company’s growth trajectory and the evolving demands of the IT services market. Under EQT’s guidance, Nexon has established itself as a prominent player within the Australian IT landscape, possessing a robust customer base and diversified service offerings. The deal is expected to provide Nexon with additional resources and strategic direction to further enhance its growth and market presence.

The acquisition marks a pivotal milestone for Nexon as it embarks on its next phase of development. Adamantem Capital’s involvement is anticipated to bring new opportunities for investment and expansion, allowing Nexon to leverage its established foundation for future advancements.

Investor Information

EQT has been an active investor in both the Australian and New Zealand markets since 2010, establishing its Sydney office in 2020. The firm’s investment philosophy encompasses a diverse portfolio across sectors such as technology, services, and healthcare. EQT has demonstrated a keen interest in companies with innovative potential, and its investment in Nexon is a testament to its commitment to fostering growth in the technology sector.

With a focus on value creation through partnership and operational enhancements, EQT has positioned itself as a leading private equity firm in the region. The firm’s comprehensive approach aligns with Nexon's ambitious growth strategy, making it a valuable partner in scaling the business.

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The sale of Nexon to Adamantem Capital presents a compelling opportunity for both parties involved. From an investment perspective, Nexon has already demonstrated a remarkable growth trajectory, indicating strong operational performance and market demand for its services. The company’s history of successful acquisitions also points to a solid strategic foundation, making it an attractive asset for Adamantem Capital.

Furthermore, the current trends in the Australian IT services market suggest that Nexon is well-positioned to capitalize on emerging opportunities, particularly in the realms of cloud computing and cybersecurity. The expertise that Nexon brings, combined with potential new resources from Adamantem, could lead to accelerated growth and innovation.

However, it will be critical for Adamantem Capital to effectively integrate Nexon’s existing operations while exploring avenues for further scale and expansion. The evolving demands of the IT sector also mean that Nexon must remain agile and adapt its services to meet client expectations continuously.

In conclusion, the acquisition could potentially yield significant returns for Adamantem, provided that strategic initiatives are implemented successfully. The partnership is poised for success, given Nexon’s established market position and growth potential within the dynamic Australian IT services landscape.

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