Comments on: Two Managed Service Providers Merge http://www.mspmentor.net/2009/01/29/two-managed-service-providers-merge/ Managed Services & Cloud Services Blog for VARs & MSPs Tue, 14 Feb 2012 15:37:02 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Joe Panettieri http://www.mspmentor.net/2009/01/29/two-managed-service-providers-merge/comment-page-1/#comment-46089 Joe Panettieri Fri, 20 Mar 2009 01:55:16 +0000 http://www.mspmentor.net/2009/01/29/two-managed-service-providers-merge/#comment-46089 Jim: The takeover trend is going global. I was on a Webcast tonight with Tim Dickinson, the head of Kaseya's Australia business. He noted that MSPs -- many of them small companies -- have started buying one another. As people read/hear about such deals please alert me and I will add them to our <a href="http://www.mspmentor.net/mergers-acquisitions/" rel="nofollow">MSPmentor M&A Tracker</a>. Jim: The takeover trend is going global. I was on a Webcast tonight with Tim Dickinson, the head of Kaseya’s Australia business. He noted that MSPs — many of them small companies — have started buying one another.

As people read/hear about such deals please alert me and I will add them to our MSPmentor M&A Tracker.

]]> By: Jim Van http://www.mspmentor.net/2009/01/29/two-managed-service-providers-merge/comment-page-1/#comment-46085 Jim Van Fri, 20 Mar 2009 01:07:02 +0000 http://www.mspmentor.net/2009/01/29/two-managed-service-providers-merge/#comment-46085 I suspect that even at the smaller end, that mergers will take place between MSPs in $1-2 million revenue range. We've already seen it in Providence with a couple of IT shops who had a mix of VAR and MSP models merging into one company, same mix. And, Joe, as you so correctly pointed out, there is no such thing as as merger of equals, and it certainly wasn't the case in this merger. What will be interesting is to see just how ANY of these mergers, of any size, play out over time... Jim Van Logicomm, Inc. http://www.logicomm-inc.com I suspect that even at the smaller end, that mergers will take place between MSPs in $1-2 million revenue range. We’ve already seen it in Providence with a couple of IT shops who had a mix of VAR and MSP models merging into one company, same mix.

And, Joe, as you so correctly pointed out, there is no such thing as as merger of equals, and it certainly wasn’t the case in this merger.

What will be interesting is to see just how ANY of these mergers, of any size, play out over time…

Jim Van
Logicomm, Inc.
http://www.logicomm-inc.com

]]> By: Joe Panettieri http://www.mspmentor.net/2009/01/29/two-managed-service-providers-merge/comment-page-1/#comment-46070 Joe Panettieri Thu, 19 Mar 2009 20:30:33 +0000 http://www.mspmentor.net/2009/01/29/two-managed-service-providers-merge/#comment-46070 Dave, Are you talking about $50 million in annual revenues? That's a pretty large company, in terms of the overall VAR and MSP community. I would suspect most MSPs looking to sell have less than $10 million in revenue. But that's just an educated guess. Dave,

Are you talking about $50 million in annual revenues? That’s a pretty large company, in terms of the overall VAR and MSP community. I would suspect most MSPs looking to sell have less than $10 million in revenue. But that’s just an educated guess.

]]> By: Dave Cummings http://www.mspmentor.net/2009/01/29/two-managed-service-providers-merge/comment-page-1/#comment-46052 Dave Cummings Thu, 19 Mar 2009 14:39:07 +0000 http://www.mspmentor.net/2009/01/29/two-managed-service-providers-merge/#comment-46052 We're seeing more M&A conversations taking place between smaller $50.0 revenue companies becoming agressively opportunistic, even though the markets remain chaotic. The SMB and SME markets continue be very competitive, with customer acquisition costs remaining high. The biggest challenge remains getting to scale, since many companies maintain a fixed cost infrastructure that limited profitability until certain thresholds are met. We’re seeing more M&A conversations taking place between smaller $50.0 revenue companies becoming agressively opportunistic, even though the markets remain chaotic. The SMB and SME markets continue be very competitive, with customer acquisition costs remaining high. The biggest challenge remains getting to scale, since many companies maintain a fixed cost infrastructure that limited profitability until certain thresholds are met.

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