Private capital firm Alceon has taken a majority stake in IT managed services business Engage Squared, one of Australia’s largest independent Microsoft partners.
The undisclosed size investment is the first from Sydney-based Alceon’s recently launched Private Equity Access Fund and seeks to repeat a prior succcess.
Founded in 2014, Engage Squared helps businesses and government organisations adopt artificial intelligence, strengthen cybersecurity and improve employee productivity and collaboration using Microsoft technologies. The company employs around 170 people in eight offices across Australia, New Zealand, and the broader Asia Pacific region.
Engage Squared plans to use the new capital to accelerate growth, deepen its AI capabilities and broaden the services it offers.
Alceon managing director and head of private equity Zac Midalia said: “Engage Squared sits at the intersection of two themes where we have strong conviction: the Australian lower mid-market and enterprise adoption of AI. The business has established a commanding position within the Microsoft ecosystem, building an impressive reputation for helping organisations translate AI ambition into practical outcomes. There is a significant opportunity to invest behind that growth story both organically and through targeted acquisitions.
“More broadly, Alceon continues to see compelling opportunities to partner with exceptional founders and management teams operating in sectors benefiting from long-term structural growth. Engage Squared is a best-in-class example of that strategy in action.”
Engage Squared group chief executive Alastair Cashen said the company was in the strongest position it had ever been in, and the investment would help it accelerate its momentum.
“We believe AI represents the most significant technology shift of our generation,” he said. “As demand continues to grow, this partnership positions Engage Squared to expand our impact.”
Cashen will continue to lead Engage Squared supported by the existing senior management team. Management will retain significant equity in the business. As part of the transaction, co-founder Stephen Monk will leave Engage Squared.
Alceon’s investment represents a return to the managed IT services sector in which it has had prior success. Alceon first invested in efex in 2021 and supported that company through multiple acquisitions before exiting its stake to Advent Partners at a 2.5x return late last year.
Image: Alceon head of private equity Zac Midalia.