Sourcepass Buys NST To Help Build A $500M MSP Business
‘I would say our aggressive goal is we’d love to exit this year close to $100 million in revenue, which is ambitious,’ says Chuck Canton, Sourcepass founder and chairman. ‘And we want to be a top 10 managed service provider by the end of this year.’
Sourcepass has purchased 155-person IT service provider Network Solutions and Technology (NST) to lay the infrastructure for a $500 million managed services business.
The NST deal marks the first of a planned seven acquisitions Sourcepass is targeting for 2022, and is expected to help the company invest in a go-to-market strategy that makes it easier for SMBs to procure IT services overall.
Chuck Canton, Sourcepass founder and chairman, said this is just the beginning. Canton said the plan for the next five years is to achieve $500 million in revenue.
“I would say our aggressive goal is we’d love to exit this year close to $100 million in revenue, which is ambitious,” Canton told CRN in an interview. “And we want to be a top 10 managed service provider by the end of this year.”
Sourcepass will be extending its digital capabilities via interactive web portals and mobile applications to NST’s 400 SMB customers across 38 states and more than 20,000 endpoints.
Canton said the growth plan for the next five years to achieve $500 million in revenue translates to thousands of customers and hundreds of thousands of endpoints as a part of that.
“NST laid the framework to do that,” he said. “Their operational maturity parallels any company that I’ve been at in the past, and they’re way beyond their size today as far as what they’re built to absorb. There’s very little enhancements that need to be made outside of us doing this digital experience, and the interactive portal and the single pane of glass to achieve that growth.”
Through this agreement, NST will serve as the platform company for Sourcepass’ organic and inorganic growth, with plans for all future acquisitions to be integrated into the NST operating model, Canton said.
Sourcepass has added on NST’s 155 employees and its locations in New York City, Long Island, N.Y., New Jersey, Connecticut and Tennessee. The combined company’s headquarters will be at NST’s existing headquarters in Long Island.
William Collins, NST CEO, said the team at NST looks forward to the future and what they will achieve together with Sourcepass as one enterprise.
The NST acquisition was funded through a combination of cash and equity, said Sourcepass’ Canton.
In addition, Canton said Sourcepass closed a $70 million funding round. Canton said the funding came from three categories of investors. Metro Partners, a large institutional, funded a major portion of the found, he said. The other funding came from NST, Wedge Venture, and several experienced angel investors. The latest round of funding was a combination of debt and equity financing, he said.