Managed services News
Entech Becomes Platform MSP With Private Equity Investment
Joseph F. Kovar
‘The interesting part of talking with private equity companies, or when looking to acquire a company, is the importance of company culture. No integration is 100-percent smooth. It takes time to do. But the time we spend on culture sets us up for success,’ says Entech CEO Jake Spanberger.
Entech, a 25-year-old managed service provider, on Thursday unveiled it has taken private equity funding from Prospect Partners with a goal of becoming a platform MSP.
As a platform MSP, Entech plans to acquire a number of Florida-based MSPs in order to build a state-wide managed services practice, said Jake Spanberger, CEO of the Ft. Myers, Fla.-based MSP.
“We’re looking at companies across Florida,” Spanberger told CRN. “And if the opportunity and culture is right, we’ll also look elsewhere. We’re in talks with a couple now.”
The amount of funding from Prospect Partners was not disclosed.
Entech was started by Spanberger’s stepfather who handed over the reins when he retired in 2013, and has been looking at growth through acquisitions since. The MSP in 2014 partnered with Dallas-based private equity company Cogent Partners, which led to the 2015 acquisition of United Systems Computer Group, which more than doubled its headcount, Spanberger said.
“We wanted to grow, and looked at acquisitions,” he said. “We wanted to build something we could scale. In 2017, we got involved in IT Nation and got transferred to [ConnectWise executive] Arlin Sorensen’s peer group. Arlin is still an informal advisor who taught us about the need to scale. We realized in 2017 that we were building a platform MSP.”
Entech, a member of CRN’s Pioneer 250 MSP list, got that scale in October 2021 when it acquired a local competitor, ITVantage, which took its headcount from 40 to 75 employees, Spanberger said. The deal closed in January of 2022.
“We were ‘frenemies,’ he said. “Our offices were just two miles apart.”
Shortly thereafter, Spanberger met Brad O’Dell, a partner at Prospect Partners, which invests in growing entrepreneurial companies looking for ways to reach a new level of growth, O’Dell told CRN.
Entech is Prospect Partners’ first MSP investment, and its 55th platform investment, O’Dell said.
“After COVID-19, we started looking at managed services,” he said. “We looked to get a platform company. It was an attractive space with good growth. The tough part is finding the right management team. We met with Jake [Spanberger] and his team, looked at their long-term vision, and found that them and us in a situation where we were aligned on culture and growth.”
Abe Garver, managing director and MSP team leader at Focus Investment Banking, a Vienna, Va.-based midmarket investment bank, told CRN he has worked with O’Dell and Prospect Partners for over a decade, and a couple years ago started working to help introduce the private equity firm to potential platform MSP prospects he felt would be a good fit.
“I didn’t want to bring in one and say, ‘This is it,’” Garver told CRN. “I wanted to bring in variations on a theme. I saw a great cultural fit between Prospect Partners and Entech in that both businesses liked each other on a personal level. The cultural, strategic, and geographic fits all worked.”
That cultural fit is key, Spanberger said.
“The interesting part of talking with private equity companies, or when looking to acquire a company, is the importance of company culture,” he said. “No integration is 100-percent smooth. It takes time to do. But the time we spend on culture sets us up for success.”
Entech is the second MSP this month looking to build a major presence across the state of Florida. Charleston, S.C.-based Cantey Tech Consulting, a platform MSP backed by Reston, Va.-based private equity firm LNC Partners, just acquired Hollywood, Fla.-based Palindrome Consulting.