Evergreen Services Group Expands Into UK With MSP Acquisition

’I describe it as TFS version two, and version two will be significantly better and stronger than version one, which is exactly how it should be,’ says Raja Pagadala, managing director of The Final Step.


Holding company Evergreen Services Group has expanded its reach into the UK after acquiring its first London-based MSP The Final Step.

TFS will continue to operate independently within Evergreen’s MSP partner portfolio. Terms of the deal were not disclosed.

“The way Evergreen does business has been a little misunderstood,” Craig Fulton, advisor for brand, M&A and community for San Francisco-based Evergreen, told CRN in an exclusive interview. “We are a private equity-backed company but we are a holding company, so we buy MSPs to hold them forever. We understand that small business change can disrupt employee satisfaction. It could disrupt the customer base, so we prefer to keep the brand, keep the leadership team, keep all the systems and keep running the business just as it was when we acquired it.

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“This model we have of preserving the business is a really great fit in the UK,” he added. “It just provides another good option for MSP owners there that are looking for what’s next.”

[Related: The 15 Biggest MSP, Solution Provider M&A Deals In 2023 (So Far)]

The Final Step was a “great fit” for many reasons, he said, including having The Final Step managing director Raja Pagadala as he’s very “plugged in” to the MSP market in the UK.

But Pagadala, who has run the company since launching it in 1987, is stepping down as managing director and into an advisory role as Luisa Marques, general manager, will be taking over the company.

While approached many times to sell his company, he knew Fulton for years and said it finally felt like the right time to sell.

“I liked their model, I liked their approach and I wanted to make sure that my colleagues, probably more than anyone else, all ended up thinking that what I’ve done is a good thing,” Pagadala told CRN. “We have the help of a bigger group who has the experience to do things that we haven’t been able to do. I describe it as TFS version two, and version two will be significantly better and stronger than version one, which is exactly how it should be.”

He added that he believes Evergreen will get the message out about TFS and help the company grow in the right way.

And the team, 18 employees in all, is excited to grow, Marques said.

“They’ll help us find clients who allow us to do that, and for us to have that opportunity to service more clients of similar mindset,” she told CRN. “That’s fantastic to have that opportunity by them.”

Going forward, she plans to meet budgets, and exceed them.

“I want to continue with the amazing work that Raja has done over the last 36 years, not just for staff but clients and the community,” she said. “We’ll give it our best and make TFS even better. I’m also very excited to have Evergreen entering the UK, for us to be the first company and for the both us to achieve great things.”

Fulton said TFS is a “very sound company with great revenue, EBITDA numbers and a strong customer base.”

“It felt like just such a great first company for us to come over there and to establish a baseline,” he said.

Alex van Lent, M&A professional at Evergreen, said the firm’s approach is a more novel way than how most private equity firms typically transact.

Evergreen currently has about 65 solution providers under its umbrella but also acquires verticals such as government and financial services firms. It acquired about 20 companies in the last year and is ramping up to several a month.

After acquiring an MSP, Evergreen typically likes to see 10 to 15 percent year-over-year revenue growth, and van Lent says its MSPs typically surpass that, sometimes tripling their revenue growth.

“Being part of a larger organization…we have some resources, we have some serious learnings,” van Lant said. “From the last five years of having 60-plus MSPs I think we’ve got some proven playbooks for organic growth, sales and marketing and maybe some ways that we can improve their financial maturity. I think there’s an excess opportunity for people to step up and grow within each of their businesses rather than getting lost in this larger machine.”