Sirius Confirms Forsythe Purchase Plans; Will Create A $3.26B Solution Provider Powerhouse

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Sirius Computer Solutions has announced it is acquiring Forsythe Technology, creating a 3,000-employee company with deep expertise in security and managed services.  

“Combining with Forsythe helps us expand the depth of our solutions and services offerings for our clients, specifically in security, risk management, and data center transformation," Joe Mertens, president and CEO of Sirius, said in a statement. "We look forward to combining the best of both companies in support of our commitment to the high quality delivery of customized solutions for our clients.”

The San Antonio, based-company, No. 26 on the 2017 CRN Solution Provider 500, expects its purchase of Skokie, Ill.-based Forsythe, No. 37 on the CRN Solution Provider 500, to close in the fourth quarter. CRN reported in August that Sirius was in negotiations to buy Forsythe, and then Thursday that the two companies had struck a definitive acquisition agreement.

[Related: 10 Things You Need to Know About The Colossal Sirius-Forsythe Deal]

The combined Sirius-Forsythe organization will have a $509.3 million security business, a 200-employee managed services practice, and count IBM, Cisco, Dell EMC, Palo Alto Networks and NetApp as its largest vendor partners, according to materials compiled by company management.

Sirius is owned by private equity firms, with Kelso & Co. buying a majority share in the company for $830 million in September 2015. Forsythe, meanwhile, is 100-percent employee-owned.

“Combining with Sirius allows us to expand our solutions and product offerings to best serve our long-standing customer base,” Bill Brennan, Forsythe's president and CEO, said in a statement. “We are extremely impressed with the reputation and credibility Sirius has built in the IT industry, and look forward to the expanded capabilities we will be able to bring to our clients as a result of this acquisition.”

The Sirius-Forsythe deal was the result of a "heavily contested" auction with a lot of interested bidders, said Martin Wolf, president of martinwolf M&A Advisors of Walnut Creek, Calif., one of the top channel investment advisory deal makers. Wolf called the blockbuster deal a "brilliant" move by Kelso & Co. and Mertens. 

"Kelso is a deep value-added group, and Joe Mertens has demonstrated that he is an excellent operator," Wolf said.

Documents obtained by CRN indicate that job reductions are expected in certain core support roles where there are redundancies. Any U.S.-based Forsythe employees whose jobs are eliminated will receive two weeks of base severance pay plus between one and two weeks of additional severance pay for each year they were with the firm.

The combined $3.26 billion Sirius-Forsythe organization will spread its business more equally across a mix of vendors, with no one supplier accounting for more than 23 percent of overall sales, according to information from CRN sources. 

In the fiscal year ended June 30, the two companies booked: $746.5 million worth of business with IBM; $731.8 million with Cisco; $302.5 million with Dell EMC; $104.5 million with Palo Alto; and $96.8 million with NetApp.

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