An Acquisition Success Story: Copier Companies Move Into the MSP Space

Jeffrey Loeb said his managed service provider business Infitech was humming along some 20 months ago. Sales were growing at an average rate of 30 percent per year.

But Loeb, owner of the company since 1999 when he and a partner launched it, recognized the Cincinnati-based company was hitting a wall when it came to sales. He said it’s true some people in IT don’t know how best to sell their services.

So when Loeb received a call from the Ohio office equipment company ProSource, he was intrigued by a proposed acquisition and what that deal could do for his business.

[Related: How One Solution Provider Got Ahead of the Managed Print Services Market]

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Fast forward nearly two years later and Loeb said the sale in January 2013 was the best option for his company. Sales are up and in his new role as vice president of operations at ProSource, Loeb said he can still oversee the managed services side of the ProSource business, only now with a customer base nearly 10 times what it was before.

’That (MSP) model worked very well for us,’ he said. ’We were growing 30 percent a year but decided we needed a better way to do sales. We got a call from ProSource, the leading office equipment dealer in the region. … Along with most of the dealers around the country, they were looking to get into the managed service industry. It’s a natural progression from what they were doing.’

Loeb said the acquisition immediately boosted his business. Infitech was a $2.5 million company and is now on track for a five-year goal of $15 million in revenue.

’They brought something to the table we didn’t have,’ he said. ’They have the knowledge and the expertise to do sales. The office equipment industry is really a sales-focused industry. They’re out there every day selling new equipment to customers, … and roughly one-third of their staff is in sales.’

Taylor Strong, representative for ProSource, told CRN adding another pillar to their offerings in IT services made their products attractive to a customer base of about 8,000. The MSP end of the company helps ensure copiers, printers and other office supplies will be managed properly.

’While there’s obviously a natural transition, I know from ProSource’s standpoint that this merge was very strategic,’ she said. ’Being able to offer both suites of business technology products and services changes the game in a way I don’t think we even realized yet, as far as being able to be ’the guy’ to our customers.’

NEXT: Offering MSP Services Differentiates Office Equipment Companies In The Market

Loeb echoed the ease of the transition for ProSource -- offering IT services will now differentiate them in the market, he said. Loeb added more and more office equipment companies in the area appear to be coming on board by shifting into MSP work.

’I think there’s a general movement in the office equipment industry to get into managed services,’ he said. ’There are some that are doing it successfully and some that are struggling with it because it’s a very different business model. You have to look at this from a completely different perspective than you do in the office industry. It’s focused on the ongoing maintenance and support of our accounts, more so than selling new equipment.’

Strong noted Infitech was sought after in the area. The acquisition has been beneficial to both companies, she said.

Loeb stressed that ProSource ’did it right,’ working to keep the same culture at Infitech throughout the transition, maintaining irregular hours for IT professionals especially. Loeb said he believes more acquisitions of this kind will continue across the channel, but for now ProSource is ahead of the curve.

’We want to be a Midwest leader,’ he said. ’… We couldn’t grow to the full potential of what we thought we could do without help. Our weakness was on the sales side and generating new business. That’s where the office industry has the biggest impact.’