Top 11 Deals Reshaping The Channel In November
Private Equity, Vertical Specialties At A Premium
Capabilities in verticals from investment banking and financial services to the public sector and education were in high demand in November, with three of the 11 channel firms swooped up last month having a pronounced industry focus.
Powerhouse partners drove a lot of November's M&A action, with five of the big channel deals carried out by the 55 largest companies on the CRN 2015 Solution Provider 500. Three other deals were undertaken by private equity firms.
Five of the acquired companies are in the northeastern United States, two are in the Midwest, two are in California and two are abroad. Four of the acquired firms are SP 500 companies.
As the total revenue for all acquired companies was not available, CRN ranked the acquisitions based on the total number of employees of the firm being acquired.
Presidio
Company acquired: Sequoia Worldwide
Head count: 11-50 employees
Annual sales: Not disclosed
Purchase price: Not disclosed
Date of announcement: Nov. 30
Presidio purchased Campbell, Calif.-based Sequoia Worldwide to help strengthen its automation, orchestration and brokerage capabilities around Cisco Systems, VMware and Microsoft.
New York-based Presidio, No. 21 on the CRN SP 500, said Sequoia will become the cloud business unit for Presidio, boosting initiatives around private and hybrid cloud. Sequoia focuses exclusively on consulting, integration and services around cloud solutions.
The Sequoia deal comes a month after Presidio sold refurbished hardware reseller Atlantix Global Systems, No. 155 on the SP 500, to Millstein & Co., claiming that Atlantix was no longer core to Presidio.
Cologix
Company acquired: Net Access
Head count: 70 employees
Annual sales: $27.7 million
Purchase price: Not disclosed
Date of closing: Nov. 19
Summary: Denver-based data center services provider Cologix boosted its data center square footage by 40 percent after closing its purchase of Cedar Knolls, N.J.-based Net Access on Nov. 19.
The deal will add three data centers and 280,000 square feet of data center space to the company's existing 21 data centers, increasing Cologix's client base by about 26 percent, to more than 1,600.
The new data centers are just 30 miles outside New York City in northern New Jersey and sit more than 250 feet above sea level, providing safe colocation services at a cheaper price than alternatives in New York City.
New Signature
Company acquired: imason
Head count: 51-200 employees
Annual sales: Not disclosed
Purchase price: Not disclosed
Date of announcement: Nov. 2
Summary: New Signature expanded its already top-ranked Microsoft portfolio when it announced plans to acquire Toronto-based application developer imason.
Washington, D.C.-based New Signature, Microsoft's 2015 solution provider of the year, added imason to strengthen its ability to provide solutions across the full Microsoft portfolio. Imason is New Signature's third recent purchase, after the acquisition of Microsoft partners CMS Consulting and Infrastructure Guardian.
Microsoft honored all three of the acquired companies with its 2015 Canada Impact award for their combined efforts in transforming software solutions into fully managed services via Azure, Microsoft's enterprise-grade cloud platform.
Court Square Capital Partners
Company acquired: Ahead
Head count: 51-200 employees
Annual sales: $250 million
Purchase price: Not disclosed
Date of announcement: Nov. 3
Summary: Private equity firm Court Square Capital Partners acquired Chicago-based Ahead, No. 85 on the CRN SP 500.
Ahead plans to leverage New York-based Court Square to develop new solutions in areas such as enterprise service management, cloud infrastructure and mobility, according to CEO Daniel Adamany. These technology areas are rapidly converging, which should result in a more holistic platform for next-generation services and applications.
Ahead has accelerated its growth rate since 2013 thanks to a multi-year strategy focused on helping clients take advantage of technology advances and adding expertise to help clients deploy cutting-edge technologies, Adamany said.
Sverica Capital Management
Company acquired: Synoptek
Head count: 300 employees
Annual sales: Not disclosed
Purchase price: Not disclosed
Date of announcement: Nov. 2
Summary: Private equity firm Sverica Capital Management purchased Synoptek to help the Irvine, Calif.-based managed service provider carry out an aggressive geographic and service expansion.
Synoptek plans to strengthen its presence in the northeastern United States and Europe, and grow its security and managed hosting services practices, thanks to Boston-based Sverica's acquiring a majority stake in the firm.
Sverica bought out the majority of Synoptek’s current owners, which include private investors involved since 2012, institutional firms holding a combined 40 percent stake in the company and a small portion of the management team stake.
GTCR
Company acquired: Park Place Technologies
Head count: 330 employees
Annual sales: Not disclosed
Purchase price: Not disclosed
Date of announcement: Nov. 30
Summary: Private equity firm GTCR plans to purchase third-party maintenance provider Park Place Technologies to further accelerate the geographic footprint and service offerings of the Cleveland-based company.
Park Place, No. 270 on the CRN SP 500, said the acquisition by Chicago-based GTCR will make it easier for them to ride the cloud adoption wave. Demand has grown around Park Place’s post-warranty maintenance services for networking and data centers as companies look to shift more functions to the cloud.
GTCR said it plans to commit more money to Park Place to fund future acquisitions and organic growth initiatives.
SS&C Technologies
Company acquired: Primatics Financial Holdings Inc.
Head count: 384 employees
Annual sales: $51 million
Purchase price: $122 million
Date of closing: Nov. 16
Summary: Windsor, Conn.-based SS&C strengthened its financial services industry portfolio on Nov. 16 when it closed its acquisition of McLean, Va.-based Primatics Financial Holdings Inc.
SS&C acquired the rights to Primatics' cloud-based compliance and finance platform EVOLV, which, according to a statement by SS&C Chairman and CEO Bill Stone, is widely adopted in banks throughout North America.
SS&C, No. 38 on the CRN SP 500, has boosted its financial services industry offerings over the past 12 months by acquiring DST Global Solutions, Advent Securities, Citigroup's Alternative Investor Services business and Varden Technologies.
PCM
Entity acquired: Portion of Systemax’s North American Technology Group
Head count: 460 people
Annual sales: $800 million
Purchase price: $14 million
Date of announcement: Nov. 18
Summary: PCM acquired control of the business-to-business assets of Systemax's North American Technology Group, giving the El Segundo, Calif.-based company rights to, among other things, Systemax's TigerDirect brand.
According to PCM, No. 29 on CRN's SP 500 list, the deal will significantly expand its footprint in the SMB, education and public sector markets. Port Washington, N.Y.-based Systemax is No. 17 on the CRN SP 500.
This is PCM's third acquisition of the year, coming after its purchases of $393 million solution provider En Pointe and $111 million Canadian MSP Acrodex.
Comtech Telecommunications
Company acquired: TeleCommunication Systems
Head count: 1,100 employees
Annual sales: $364.1 million
Purchase price: $430.8 million
Date of announcement: Nov. 23
Comtech Telecommunication’s purchase of Annapolis, Md.-based TeleCommunication Systems (TCS), No. 65 on the CRN SP 500, will create a 2,000-employee behemoth with robust public safety and commercial capabilities.
Melville, N.Y.-based Comtech said the deal will create a more diversified product offering and reduce its dependence on volatile international and emerging markets. The acquisition will establish Comtech as the prime servicer on several U.S. government contracts, including for the sales of microwave radio communication products.
TCS uses a service-focused model, according to the companies, while Comtech operates more of a manufacturing-oriented business.
EPAM Systems
Company acquired: Alliance Global Services
Head count: 1,200 employees
Annual sales: Not disclosed
Purchase price: $50 million
Date of announcement: Nov. 16
Summary: EPAM Systems, No. 40 on the CRN SP 500, expanded its software engineering productivity and automation services portfolio by acquiring Conshohocken, Pa.-based Alliance Global Services.
The Newtown, Pa.-based company said it wanted to take advantage of Alliance's "strong delivery capabilities" in North America and India for those services.
EPAM began last year to expand its offerings past its core of software engineering outsourcing by going on an acquisition tear. The solution provider increased its head count to 14,000 by purchasing several companies, broadening its offerings and geographic reach in the process.
Virtusa
Company acquired: Polaris Consulting & Services
Head count: 7,650 employees
Annual sales: $288 million
Purchase price: $270 million
Date of announcement: Nov. 5
Summary: Virtusa plans to purchase up to 75 percent of Chennai, India-based Polaris Consulting & Services to expand cloud offerings and win more consulting and outsourcing deals.
The Westborough, Mass.-based company, No. 54 on the CRN SP 500, said the Polaris acquisition will make it possible for the company to provide everything from retail and corporate banking to capital markets and risk compliance to financial services giants such as Citi, J.P. Morgan, HSBC and Barclays.
Polaris has a level of depth in corporate and investment banking that Virtusa never would have been able to build organically, according to Virtusa.