MSP Merger In Las Vegas

The managed services piece of both companies had a lot to do with the merger, said Lester Keizer, new CEO of Connecting Point.

He predicts a lot of consolidation among MSPs in 2008. "We now see more value from managed services companies because of the enduring assets of recurring revenue. Before, when it was just break/fix or retail, there wasn't too much value to add to that. Now with recurring revenue, you create a whole new breadth of [revenue stream]," he said.

The combined company will keep the Connecting Point name and will be led by Keizer. Ron Cook, Connecting Point's longtime CEO, will step back from day-to-day activities but retain his chairman role. "He's not retiring. He will be very much actively involved in the vision and direction of the company," Keizer said.

Kortek's founder, Lyle Epstein, will become president and CTO of Connecting Point.

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"We've been competitors in the marketplace. We've been up against them a few times," Keizer said. "We've been talking about a merger for two-and-a-half years now, believe it or not. The timing wasn't right until now. The stars are aligned."

Connecting Point is 25 years old and Kortek has been in business for 15 years, making the companies two of the more established VARs in Vegas.

There is little overlap in customers with the merger, which was finalized for an undisclosed sum, Keizer said. The merger gives Connecting Point a higher-end Microsoft practice and a more robust mobility practice. In addition, it strengthens Connecting Point's managing services practice. Both companies used Level Platforms and Kortek was ramping its up practice at the time of the merger, Keizer said.

This was the first significant merger for Connecting Point, Keizer said. But he couldn't say whether it would be the last. "The whole world's a flea market. We're always open to opportunities is the best way to put it," he said.