MTM Technologies, formerly called Micros to Mainframes (#312 on the VARBusiness 500) has acquired solution provider Vector ESP (#350 on the VARBusiness 500), a Citrix Platinum Solutions Advisor and Microsoft Gold Partner.
The purchase is the latest in a series of deals executed by MTM since Pequot Ventures, the direct venture investment arm of Pequot Capital Management, announced it planned to invest $25 million in Stanford, Conn.-based MTM last January. In early December, MTM also announced it signed an agreement with Pequot and Constellation Ventures, a Bear Stearns Asset Management Venture Capital Fund, for up to $40 million in additional financing.
MTM CEO Frank Alfano plans to take that money and build out a nationwide business focusing on infrastructure solutions for the mid-market space by acquiring additional solution providers, he told VARBusiness in an interview. "We saw a void for a national mid-market solution provider," Alfano said, explaining the company's strategy. "The other thing driving us was we saw mid-market customers needing a trusted advisor with more of an agnostic approach, not a vendor-centric approach." He also said vendors have seen the need for a company like MTM with a national business focus and support the build out.
The CEO defines the mid-market as 100 to 2000 employees and believes the company's clients will look to it to be their specialist in infrastructure. "Clients with multiple locations are our sweet spots," he said. "We want to become a one-stop shop to meet their infrastructure needs."
Interestingly, Alfano also looks for clients that are Fortune 500 sub brands or a distributed sales group focused on one product set. A division that has its own particular needs acts like a mid-market client, he said.
Currently, MTM has 17 offices in major markets and is looking to acquire additional companies where it doesn't yet have a strong presence, including the Southeast and the Northeast, in order to build its national footprint, Alfano said. "Equally important are the solutions we want to provide clients. We may buy a storage-based business... then expand it across our infrastructure."
In addition to the Vector deal, which adds 12 major markets in the central and western United States while expanding remote office connectivity and workforce mobility practices, MTM has made a number of other acquisitions during the course of the year.
In September, MTM acquired Network Catalyst, which added a West Coast presence and expanded the company's VOIP and network practices. And this past July, it bought DataVox Technologies. That company, located in New York City's Wall Street district, is a premier Cisco AVVID partner, offering advanced technology solutions. "That brought a solutions oriented business to us and got us into VoIP," said Alfano.
With its $157 million annual run rate, MTM wants to expand its VoiP capabilities and continue its geographic expansion. "Voice-data convergence appears to be an opportunity. The pipeline is looking good," he pointed out. "And it's a natural into managed services."
Alfano said his company is looking to acquire solution providers that want to "take their business to the next level." He said the company spends "a lot of time" reviewing its M&A pipeline. "The targets interesting to us understand there they have a growing opportunity but don't have the capital structure or... capabilities to expand. It's the owners who recognize that and become attracted to us," Alfano said.
Asked if he plans to grow MTM Technologies then sell it, the CEO was adamant that wasn't it the cards. "We're not building a thing to flip. We're going to be around for a long time," he said. "We feel we are in the very early stages in terms of the size the company will grow to."