Forsythe Technology, a $1 billion solution provider behemoth which has made significant investments in building out its business over the past several years, is up for sale, according to sources close to the company.
Forsythe has hired an investment bank and is actively shopping the 100 percent employee-owned company, said one source with ties to the investment banking community. The source said the company is an attractive target for the right buyer looking to capitalize on the broad portfolio that Skokie, Ill.-based Forsythe – No. 37 on the 2017 CRN Solution Provider 500 – has built out over the past several years.
"With the right buyer, there are a lot of costs that can be taken out," the source said. "There are a lot of investments that Forsythe has made that are really expensive. What buyers are going to be looking at is: Are those investments yielding a timely return?"
Forsythe's status as an employee-owned business has made for a more benevolent structure than competitors in the public market such as Presidio, No. 21 on the CRN SP500, and ePlus Technology, No. 35 on the CRN SP500, sources said. That has provided Forsythe with broader latitude in making a wide range of investments aimed at growing the business, sources said.
"It gives you a lot of flexibility," said the source of the employee-owned structure. "You don't have the pressure from shareholders and private equity. It is a more casual, relaxed model."
Forsythe, in fact, has bought 10 companies since 2001 and in 2015 launched both its Meta7 Division to deliver Oracle consulting and integration services and its Hosting Solutions Division.
Forsythe also has a data center business. The company broke ground on a $130 million data center facility in Elk Grove Village, Illi., in 2014, opened Forsythe Data Centers in spring 2015 and then sold the real estate last August to T5 Data Centers and leased back the space.
In a written response to CRN on whether the company has been put up for sale, Forsythe said: "We don’t confirm or deny rumors. We've had very strong results this year across all lines of business. Our hosting solutions revenue under contract is up double digits for the third year since we launched the business. Our professional services business is up double digits as well, and our product business is also up. We remain focused on continued investment and growth. We see great opportunities going forward."
Forsythe – whose sales have remained stable at about $1.1 billion for the last four years- - said it has been profitable for 46 consecutive years with double-digit operating earnings in 2016. What's more, Forsythe said its Dec. 31, 2016, share price valuation was the highest in its history: 12 percent above the 2012 evaluation.
The company – which has 1,000 employees including 500 engineers and consultants with 2,500 certifications – has notched an impressive 40-plus Partner of the Year awards including a Red Hat Innovation Partner of the Year award in 2017, and several Oracle and Cisco partner awards in 2016.