This just in from MSPmentor’s sister site, The VAR Guy: A start-up company, currently working in stealth mode, intends to acquire multiple VARs, integrators and managed service providers. Total combined revenues for the acquired companies will be about $100 million to $120 million.
Alas, our resident blogger can’t share more details until August 25. But he can say this: The start-up sounds well-funded and has a seasoned management team that has previously built at least one major software company. Complete details on August 25. Until then, mum’s the word.
Posted In: MSP Mentor
Tags: Managed Service Provider | Managed Services | Mergers and Acquisitions | MSP | Sales Strategies | Value added resellers | VARs
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This is a great sign for our industry, if a seasoned team can pull together this kind of capital for an acquisition then we must be doing something right!
Not sure if this is a good sign or not. Managed services roll-ups have been done, with 10s of millions invested, and no signs of being acquired by a larger company. There are scores of them. Not sure if building one into a 100 to 120 million range makes them any more attractive to a bigger company, perhaps for the expanded client base, but the economics have to be there. IBM bought ISS for what amounted to $100,000 for each account. Likely, IBM has already plowed back into each one and fork-lifted in more gear and services to make up for the investment outlay.
Scott: I agree that roll-ups are a tricky thing. But check our follow-up story with more details here.