Martinwolf Celebrates 25 Years Of Game Changing Midmarket IT Services Deals

“One of the things I’m most proud of is that we have done more SP 500 and system integrator transactions than any investment bank in the country over the last 25 years,” said Martinwolf founder and managing partner Marty Wolf. “Our motto from the beginning was ‘Never Give Up. Never Surrender.’

Marty Wolf (pictured) never imagined that the company he started 25 years ago that bears his name, martinwolf, would become the preeminent investment banker/deal maker for midmarket IT services companies.

“It was very difficult,” recalls Wolf of those early days, breaking into the elite Ivy league dominated technology banking business. “When I started we had no precedent transactions. I had no happy clients.”

What Wolf – the founder and managing partner of martinwolf - did have was an unmatched knowledge of the solution provider business and the trust of the many resellers he had worked with during a 16 year career at two of the largest and most respected channel powerhouses (Computerland and Merisel) of the day.

“I relied on customers who worked with me at Merisel and Computerland because the coin of the realm in banking is trust,” said Wolf, a one time president of the franchise division of Computerland, a $1 billion retail technology powerhouse in its heyday and Merisel, the second largest publically held computer products distributor in the mid 90s. “These people would stand up and say you can trust Marty Wolf.”

[Related: The 10 Biggest Tech M&A Deals Of 2021]

Wolf has parlayed that trust into what has become the Goldman Sachs of the midmarket IT services business. Headquartered in Scottsdale, Arizona, martinwolf has completed more than 220 deals in 20 countries at a combined value of more than $6 billion. “One of the things I’m most proud of is that we have done more SP 500 and system integrator transactions than any investment bank in the country over the last 25 years,” said Wolf, a proud and scrappy University of Michigan business graduate and Wolverine football fan. “Our motto from the beginning was ‘Never Give Up. Never Surrender.’ I think of myself as an IT reseller industry guy. I always have and I always will. I learned from reseller operators who I still learn from. The single most important thing I look at it is not the quality of the asset. It is quality of the principals who I will be supporting. I won’t work with somebody I can’t learn from. I have to like them and be able to learn from them. Embedded in that is a level of respect.”

From the beginning, Wolf – who had turned down several opportunities to take another job leading a computer products distribution company- was driven by the opportunity to work closely with solution provider entrepreneurs and owners. “I didn’t want to work in a corporate environment,” he said. “I wanted to work with owners of businesses who were and are the heartiest and best business people I have ever worked with. I learn from these guys everyday. These guys aren’t manufacturers. They don’t have proprietary things. They have to figure out a way to satisfy customers everyday.”

Wolf was determined from the outset to eschew the arcane, convoluted and far-flung investment banking model that often leads to conflicts of interest with clients. “What we have done that is different is we have always aligned our interests directly with our client’s interest,” he said. “We don’t go ugly early. We don’t have convoluted fee arrangements that pay us to leave sooner. We develop relationships with our sell side clients. We don’t do other things. I can’t come in one day and say I’ll sell your company and next day help position you if you pay us. We only do M&A. We just buy and sell.”

Wolf saw first hand when he worked at Computerland and Merisel the “dissatisfaction” with bankers. “I was determined not to run a business where people were unhappy and at the end tried to take it out on our fee,” he said. “In 200 plus transactions we only had only two cases that didn’t work out on being paid properly and those were adjudicated in our favor. We are close to 100 percent. We have always aligned our business with our clients. We do things the right way. For the first 15 years our logo was ‘M&A The Right Way.’”

Wolf got his first taste of the business when computer industry pioneer and Vanstar (formerly Computerland) CEO Bill Tauscher approached him to close a deal with an Atlanta VAR. That deal provided some financial footing for the fledgling business. “That deal financed the company,” said Wolf. “I never put money into the company. I only have taken money out. I contributed a mini-refrigerator and a laptop. That was it.”

The first deal Wolf sourced completely on his own was a $2.5 million deal for an Entrée computer franchise in Lafayette Indiania that was sold to Sayers Technology Services, founded by NFL superstar Gale Sayers. “The funny thing is the owners of that Lafayette Indiania business were both smokers so when you walked into that business it was like a pub,” said Wolf. “The first thing we did before we put the company on the market was made the owners smoke outside and repainted the office. We can’t sell a pub we told them. We can only sell a reseller. That was our critical advice to sell that company.”

As martinwolf started doing one deal after another, word got around that the company was a trusted, high integrity deal maker who always did what it said it would do and could be counted on to always put its clients’ interest first. One of Martinwolf’s mainstay customers has been RSM, one of the largest independent accounting, audit and tax firms in the US. Most recently, Martinwolf represented RSM in the acquisition last June of an elite ServiceNow partner, Rego Consulting, Salt Lake City. “It’s a good example of the buy side work we do,” says Wolf.

When Wolf first got into the business, resellers traded at as much as one times their revenue. Today they trade at as low as 20 percent of revenue and as high as 80 percent of revenue.

The bigger pay days today are coming from SaaS (software as a service) companies selling for five to 15 times revenue and ServiceNow and Salesforce.com solution providers that are selling at two to four times revenue, said Wolf.

The bread and butter solution providers, meanwhile, are trading at the highest multiple of EBIT (Earnings Before Interest and Taxes) since 2000, said Wolf. “There was a time when you could buy publically traded VAR for three to four times EBIT,” he said. “Today, the better publically companies trade at between 10 to 18 times EBIT.”

As for who are the CEOs he has worked with over the years that he most admires, Wolf puts Tauscher (“a brilliant executive who outran his troops”) at the top of the list. “The single most important influence in my business life other than my father is Bill Tauscher,” he said. “He is a serial entrepreneur who has been very influential for me. He is a shareholder in Marty Wolf – not Martinwolf.”

Tauscher, for his part, says he knew from the outset that Wolf would be successful in the investment banking business. Wolf, in fact, had displayed his deal making mettle working for Tauscher at Computerland. “Marty was in charge of the program to recruit franchisees and made all of our deals,” said Tauscher. “It was clear that he was an amazing negotiator. He just has the instinct and the mental quickness to negotiate a transaction. He was able to negotiate those deals and have everyone walk away happy. That is hard to do.”

In fact, the person on the opposite side of the deal would end up feeling so positive that they would often end up hiring Wolf to make another deal. Building those strong relationships on both sides of the deal is rare in the investment banking business, said Tauscher.“People trust Marty,” he said. “That is the key to his success and really what has allowed him to build an amazing business helping very successful entrepreneurs buy and sell companies.”

Other top executives that Wolf admires: Insight cofounder and Chairman of the Board Tim Crown; Converge Technology Executive Chair of the Board of Directors Thomas Volk;former Compucom CEO Jim Dixon and Computacenter CEO Mike Norris.

In fact, Wolf says he sees the top executives running solution provider businesses today – like Norris- as flat out better business people than the Fortune 500 CEOs running technology vendors. “These (solution provider) executives have to carve out ways to deliver solutions that are cheaper and better than from the manufacturers themselves,” he said. “These are the best business people around.”

Wolf says nearly 100 percent of the company’s business today comes from strong personal recommendations from satisfied clients. “That is the most gratifying part of what we do,” he said. “That’s how we get all of our business. We have a marketing budget of zero.”

One of the most rewarding aspects of running the business, Wolf says, is the success of the company’s internship program which has provided critical career training for for 50 young people interested in a career in business.

Wolf’s vision for the internship program was to provide real world experience for young people interested in business. “I made a deal with these students that we would train them- not saddle them with busy work like spreadsheets,” he said. “We had them from the beginning working on customer activities. We gave them access to things that they would not have been exposed to even if they worked as an analyst at a bank. We continue to provide that program.”

The company’s interns are considered friends of the firm that the company is committed to supporting for their entire career, says Wolf. “We help support these people forever,” he says. “I still talk with employers for our interns as they progress through their career.”

Martinwolf’s first intern, Paul Lyandres, started at the company when he was only 12. He used to be left off at the company by his Mom. Wolf helped him get into college with a recommendation and now Lyandres is the CFO of Procore Technologies, which has a market capitalization of $8.96 billion.

Another one of Wolf’s interns, Walter Yoon, is now a senior vice president at Martinwolf, helping close complex deals. Yoon, who worked as an intern during his senior year at Cornell, has been with Martinwolf for a decade. “He is a brilliant banker,” says Wolf.

As he looks to the future, Wolf sees the next 25 years leading to a much “stronger and bigger business” than he ever could have imagined. He sees the company culture continuing to be sharply focused on an unmatched knowledge of the IT services market. “We understand the business,” he said. “We don’t do anything where we don’t think we understand the business. And we never go out of our space. In 25 years, we have never sold anything that does not look like IT, reseller or service. We stay in our space. We don’t learn at anybody’s expense. We don’t fake it till we make it. We stay in our lane and we are very effective below $500 million. In the managed service market we are the safest and best choice for anybody looking to exit the business or enter the business.”

Wolf has no plans to slow down or step back from the business. “It’s invigorating,” he said. “This is the best team we have ever had. I enjoy it. This hasn’t been work for a long time. We work with a different breed of business person. These are people that sell jeans to gold miners. They work with technology, they make it work, they integrate it, they improve it. That is invigorating to me!”

For his 25th anniversary, Wolf’s team put together a video with heartfelt congratulations from top industry CEOs, loyal employees and his wife, Michelle, stepson Drew, his two daughters, Jessica and Abby, and his 86 and 89 year old Mom and Dad.

Ultimately, Wolf’s success goes well beyond the business to his accomplishments as a father, husband, friend and leader building a strong team at Martinwolf, said Tauscher. “What I most admire about Marty is he’s a true North person whether it be his clients, his employees, his kids, his best friends,” he said. “This is just someone you can rely on. He is super smart and quick, but this is a person that is really true North. That is the reason he has had a successful business and that his kids, friends and employees are so close to him. You can count on him. You can trust him. You can believe in him.”

Wolf, for his part, is grateful that he decided 25 years ago to start martinwolf. At the time, he was determined to be more independent to better support his family and to learn from the solution provider owners he admired so much. Things could not have worked out better, says Wolf. “I was looking at how I could best provide for my family without working for a big company,” he says. “I wanted to work in an environment where I could learn from great business people to accelerate my knowledge of the business. Through all those years it has continued to be like that. The people I get to work today are the best business people anywhere!”