The investment firm that controls a large part of Presidio, a solution provider with a national footprint, may be looking for an exit strategy.
American Securities, which acquired Presidio in 2011, is working with Barclays and Credit Suisse Group to explore a potential sale or IPO in a move that could value Presidio at near $1.5 billion, Reuters reported last week, citing unnamed sources.
Presidio, which is a private company, is expected to earn $180 million before interest, tax, depreciation, and amortization this year on revenue of $2.3 billion, Reuters reported.
Presidio and American Securities did not respond to requests for more information on a potential deal.
Marty Wolf, president of martinwolf, a Walnut Creek, Calif.-based consultant on mergers and acquisitions with a focus on channel-related issues, wrote in an analysis report that, based on the revenue and earnings information reported by Reuters, that Presidio likely has an EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of 7.8 percent, which exceeds that of its peers.
Based on the reported valuation of the company at $1.5 billion, Wolf also wrote that Presidio has an enterprise value EBITDA multiple of 8.3, which among large solution providers would be second only to CDW.
"Based on what is being reported, there are very few channel players that could acquire Presidio at this valuation. However, we expect to see strong interest from telecommunications companies looking to provide more value and differentiation in an increasingly commoditized space by branching out into cloud hosting," Wolf wrote.
Should such a deal occur, the result would be an increased value for all public and privately held solution providers similar to the increase in value they gained with CDW's 2012 IPO, Wolf said.
Presidio, which is No. 24 on the CRN Solution Provider 500 list of largest solution providers by revenue, has been a big consolidator of the channel by acquiring several of its peers over the past few years.
Presidio in 2012 acquired BlueWater Communications, a $250 million solution provider. Bob Cagnazzi, CEO of BlueWater, is the current CEO of Presidio.
Presidio earlier that year acquired INX in an $85 million deal to expand into the Western U.S.