Merger and acquisition (M&A) activity in the MSP and MSSP spaces has been relatively consistent over the years, with companies buying up one another to gain strategic advantages. This continued consolidation has led to the emergence of platform companies - MSPs and MSSPs that acquire smaller companies and roll them under the same umbrella.
ChannelE2E has an ongoing series looking into this trend. Most of these large platforms are backed by private equity firms and have a dedicated M&A team handling the logistics of sourcing, assessing, buying, and integrating these companies.
Each platform company seeks to differentiate itself in different ways. For example, Brightworks IT prioritizes cultural fit as a core element of its acquisition strategy while Ntiva’s M&A process aims to leverage the company’s broader resources and expertise to grow recently purchased companies. The 20 MSP founder Tim Conkle imagined a collaborative network of many MSPs, where owners could share wins from one company to the next.
Thrive's Acquisition Growth
Thrive, backed by private equity firm Court Square Capital Partners and founded in 2000, sets itself apart from the pack with a security-first mindset.
“There is nobody who does what we do today, end to end,” Bill McLaughlin, president, Thrive, explained to ChannelE2E.
Foxborough, Massachusetts-based Thrive's comprehensive approach includes a robust MSSP practice, advisory services with virtual CIOs, and a sizable cloud practice, McLaughlin said. He added that Thrive's integrated platform, powered by ServiceNow, allows them to offer a unique value proposition, combining traditional help desk services with advanced cybersecurity, cloud solutions, and infrastructure assessments.
McLaughlin joined Thrive three years ago. With over 20 years of experience in the managed services and data center sectors, McLaughlin has played a key role in overseeing the company’s growth and strategic direction.
Thrive has experienced significant growth in recent years. The company has expanded its services and geographic reach, transitioning from a regional focus in the Northeast to a broader national and international presence with deals in Canada and the United Kingdom.
Recent deals have included the acquisition of The Longleaf Network in North Carolina, 4IT in Miami and Austin, Texas-based IT Freedom.
Thrive’s Merger and Acquisition Strategy
Thrive has adopted an aggressive acquisition strategy as a core component of its growth model. The company focuses on identifying and acquiring MSPs that complement its existing services and align with its long-term objectives.
Thrive’s acquisition efforts are geared toward expanding its service offerings and entering new markets, particularly in regions like Florida and Texas, where economic growth has been strong.
Thrive’s approach to acquisitions is both strategic and responsive, with the company leveraging its network to identify potential targets. "We have a lot of dry powder behind us to help fuel our growth from an M&A perspective," McLaughlin said, emphasizing the importance of strategic alignment and market expansion in their acquisition choices.
Like many platform MSPs and MSSPs, a key element of Thrive’s acquisition strategy is ensuring that the companies it acquires align with its cultural values and strategic goals. Thrive places a strong emphasis on finding targets that share its vision for a next-generation managed services platform, particularly in areas like cloud security.
The due diligence process includes evaluating the leadership, cultural fit, and technical compatibility of the target companies to ensure they align with Thrive’s focus on security and innovation. By maintaining this alignment, Thrive aims to preserve the strengths of acquired companies while enhancing its overall capabilities, according to McLaughlin.
The Role of Cybersecurity in Thrive’s Strategy
Cybersecurity plays a pivotal role in Thrive’s business model, serving as both a foundational element of their daily operations and a key consideration during acquisitions. This emphasis on cybersecurity is integrated into every aspect of the company’s strategy, from protecting client data to ensuring the seamless integration of newly acquired companies into Thrive’s security framework.
"Security plays a crucial role in the decision-making process when evaluating a company for acquisition. Even if a company has its own security, it’s never a bad thing, but most of our acquisitions didn’t have the depth and breadth of the security platform we have," McLaughlin explained.
Thrive sets itself apart from other platform companies by integrating comprehensive cybersecurity measures across all the businesses it acquires.
Thrive embeds cybersecurity into the core of its operations, according to McLaughlin, ensuring that each acquired company benefits from the full spectrum of Thrive’s security capabilities. This includes everything from traditional security measures like next-generation firewalls to advanced solutions such as Security Orchestration, Automation, and Response (SOAR) systems and AI-driven incident remediation.
"We are not an aggregator; we're a true integrator,” McLaughlin said. “Each acquisition we do is fully integrated into our business within nine to 12 months. By month 12, they're all on ServiceNow, running our playbooks, integrated from a sales perspective, service delivery, and supported by our centralized services, especially in security.”
For McLaughlin, cybersecurity is not just a critical operational component, it is a strategic priority that influences Thrive’s approach to growth and acquisitions. "We built out our own SOC, which is stood up next to our NOC. We've built out a SOAR – security orchestration, automation and remediation and we've built out AI around all of that. So we have the ability to get rid of a lot of the white noise and make sure that we're getting alerts and there's remediation that is taking place much more quickly" he explained.
This approach ensures that Thrive can provide a consistent and integrated security service across all of its portfolio companies, thereby enhancing the overall value and stability of their operations.
Long-Term Vision and Future Growth
Thrive looks to build on its existing presence in key markets across the United States, including the Northeast, Florida, Texas, and beyond. Additionally, Thrive has set its sights on further expanding internationally, particularly in regions such as Canada, the United Kingdom, and Europe.
"We’re going to continue our acquisition strategy right now. We're predominantly on the East Coast, as far west as Mississippi and Texas, but we’re going to look to continue to push farther out west. We’re looking in Denver right now, Chicago... and we’re going to continue to grow our presence in EMEA," McLaughlin said, highlighting Thrive’s strategic focus on growth in both established and emerging markets.
As cybersecurity threats continue to evolve, Thrive recognizes the importance of adapting and updating its security measures. The company is focused on maintaining robust cybersecurity practices through ongoing investments in technologies like Security Orchestration, Automation, and Response (SOAR). Additionally, Thrive is exploring the development of new security solutions to ensure its operations remain effective against emerging threats.
"We continue to make large investments in security, not only in platform and product but also in people. We’re bringing in what we believe are some of the best and brightest from the industry, from analysts to CISOs, to bolster our security capabilities," McLaughlin said. Thrive’s focus on innovation is aimed at not only responding to current threats but also anticipating and mitigating future risks.
As Thrive looks to the future, cybersecurity remains a cornerstone of their long-term vision. McLaughlin emphasized the critical role that cybersecurity will play in maintaining Thrive’s leadership in the industry.
"At the end of the day, build a good company, build a better ship, and everything else will come into play. Take care of your employees, and they’ll take care of your customers and the business," he said.
