OceanSound Partners—a PE firm that invests in technology-enabled services companies working with government and highly regulated enterprise end markets—announced the closing of a $1.15 billion single-asset continuation fund transaction in connection with the sale of its portfolio company, SMX Group, from OceanSound Partners Fund, LP.
OceanSound will continue to control and manage SMX. And OceanSound will anchor the deal along with a new continuation fund managed by OceanSound.
Apollo S3 is the lead investor in the continuation fund, supported by new and current limited partners. And the continuation fund will provide incremental capital to support the continued execution of the Company’s acquisition strategy. OceanSound and SMX’s management rolled most of their equity proceeds and will remain significant investors in the company.
Launched in 1995 and based in the Washington, D.C., area, SMX is a leader in mission support and digital transformation solutions. And SMX provides scalable and secure solutions with mission expertise that enhance outcomes for public sector and commercial customers globally, including the Department of Defense, Intelligence Community, priority Federal Civilian agencies, etc.
Since buying a majority interest in SMX in 2019 as its initial investment, OceanSound – in partnership with the company’s management team led by CEO Peter LaMontagne – implemented a value creation strategy focused on building resilient and scalable corporate infrastructure, accelerating new business development activities and pursuing complementary acquisitions to drive transformative growth resulting in revenue growth from $68 million in 2019 to over $1.2 billion last year.
Evercore served as the exclusive financial advisor, and Gibson, Dunn & Crutcher, and Paul, Weiss, Rifkind, Wharton & Garrison served as legal advisors to OceanSound. And Proskauer Rose served as legal advisor to Apollo S3.
KEY QUOTES:
“We made our initial investment in SMX based on our perspective that commercial technology solutions tailored to government use cases would be increasingly relevant across the public sector to increase productivity, reduce costs, enhance cyber resilience, and improve the quality of interactions between constituents and the agencies that serve them. Our strategy of building a differentiated business focused on innovative technology solutions bridging commercial and government end markets has proved to be highly relevant to customers. We look forward to extending our ownership of SMX in partnership with Peter LaMontagne and well-respected investors led by S3 to continue building a disruptive and trusted provider of scalable and compliant technology solutions that enable customers to solve complex mission, security, and performance challenges across government and highly regulated enterprise end markets.”
– Joe Benavides, Managing Partner of OceanSound
“OceanSound has been an incredibly supportive partner over the last five years, providing deep industry expertise, sponsoring our five acquisitions, and delivering strong strategic, operational, and execution support, which has enabled SMX to continue our mission of delivering scalable digital transformation solutions to our customer base. We have realized transformative growth during the past few years and are excited to extend our partnership with OceanSound with the added support of new investors as we continue to pursue compelling growth opportunities, both organically and through strategic acquisitions.”
– Peter LaMontagne, CEO of SMX
“We are excited to partner with the OceanSound team to support the continued growth of SMX, an innovative provider of technology-enabled and mission-critical solutions. We look forward to being a value-add partner in the Company’s next chapter as it continues to empower government and commercial enterprises to become more effective and resilient with its diverse and growing suite of mission-oriented and digital transformation solutions.”
– Veena Isaac, Partner and Co-Head of Apollo S3
