Private equity firm announces majority investment in Sprout

Recognize, a New York-based private equity firm focused on investing in digital services businesses, has made a majority investment in Charlotte, North Carolina-based information technology asset disposition (ITAD) provider Sprout. Birmingham, Alabama-based New Capital Partners, an investor in Sprout since 2019, will continue as a minority investor in the company.

“Recognize’s specialization in the digital services sector, along with a strong alignment with our team on our North Star, made them an obvious partner for Sprout in our next phase of growth,” Sprout CEO Shelly Li says. “We are thrilled to continue aggressively investing in our people, clients and business together.”

Founded in 2014, Sprout specializes in the retirement of complex hardware portfolios. More than 200 at-scale and hyperscale enterprises employ Sprout’s ITAD solutions in more than 40 countries across 6 continents through a global network of processing centers, Recognize reports.

“Increasing regulation and scrutiny around secure data destruction and ESG [environmental, social and governance] creates a significant and growing need for Sprout’s services,” says Charles Phillips, managing partner at Recognize. “Sprout is uniquely positioned in a market that is currently at an inflection point as advancements in compute and demand for GenAI applications are necessitating increasing infrastructure spending and hardware refreshes within the enterprise. We look forward to partnering with Shelly and the Sprout management team to continue their rapid growth trajectory by investing in technology, expanding the solution into related areas and pursuing M&A [mergers and acquisitions] opportunities.”

Robert W. Baird & Co. served as financial advisor, while Maynard Nexsen PC and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors to Sprout. Willkie Farr & Gallagher LLP acted as legal advisor to Recognize.