M&A: Private Equity Firm Recognize Acquires ITAD Service Provider Sprout; Charles Phillips Touts Opportunity

Private equity firm Recognize has acquired a majority stake in Sprout, an IT asset disposition (ITAD) service provider. New Capital Partners remains a minority investor in the ITAD business.

This is M&A deal number 1 that Sustainable Tech Partner has covered so far in 2025. Related: See all M&A deals involving sustainability, climate tech and green IT services listed here.

ITAD M&A: Sprout and Recognize Business Backgronds

Sprout, founded in 2014, is based in Charlotte, North Carolina. The company has between 200 and 500 employees, according to LinkedIn, though we don't know a more specific headcount figure.

Sprout develops a proprietary software platform for "privacy-obsessed enterprises" that want to effectively manage IT systems from cradle to grave. Sprout has roughly 200 "at-scale and hyperscale" customers across 40 countries and six continents.

Key Sprout services include:

• White glove pick-ups and full data center decommissioning;
• on-site data destruction or data sanitization;
• secure logistics;
• asset monetization, recycling, secure destruction, or redeployment;
• reporting with data and analytics on program outcomes; and
• API integrations with hardware asset management systems.

Recognize, based in New York, is a private equity firm that invests in technology services companies. Co-founder and Managing Partner Charles Phillips is well-known across the financial services and software sector. He previously was CEO of Infor, president of Oracle, and managing director at Morgan Stanley.

The firm has made 10 investments to date. Target companies typically generate $25 million to $250 million in revenue, and $5 million to $50 million in EBITDA (earnings before interest, taxes, depreciation and amortization).

Recognize Acquires ITAD Provider Sprout: Executive Perspectives

In a prepared statement about the deal, Sprout CEO Shelly Li said: "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. We are thrilled to continue aggressively investing in our people, clients, and business together."

Added Charles Phillips, managing partner at Recognize: "Increasing regulation and scrutiny around secure data destruction and ESG creates a significant and growing need for Sprout's services. 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 opportunities."

IT Asset Disposition M&A And Market Growth Forecast

Meanwhile, M&A activity in the ITAD market remains strong. Among the reasons: Annual spending on ITAD is expected to reach $34 billion by 2030, up from $16.8 billion in 2022, according to Research and Markets. That's a 9.2% compound annual growth rate (CAGR), the researcher said.

Also, key investors in the e-waste market include the Microsoft Climate Innovation Fund -- which backs Circular Services, a startup that's building and expanding recycling infrastructure across the United States.

Among the key business drivers for ITAD spending: The growing desire to reduce e-waste -- thereby keeping PCs, laptops, smartphones, printers, networking equipment and consumer electronics out of landfills.