NexusTek, backed by Abry Partners, has acquired three IT service providers that tout MSP, IT consulting and professional services expertise. The three M&A deals also reinforce private equity's growing role in building nationwide MSPs.
The NexusTek acquisitions announced this morning include:
- Cal Net Technology Group of Southern California (ChannelE2E reported on this deal exclusively in July);
- Syndeo Technologies of Andover, Massachusetts; and
- Decision Consultants Inc. (DCI) of Phoenix, Arizona.
Financial terms from the three deals were not disclosed. In a prepared statement, NexusTek CEO Mike Jenner said:
“These acquisitions are critical milestones in solidifying NexusTek’s position in key markets, which also expand our footprint and ability to blanket the country with high-quality services, coverage and support. Cal Net, DCI and Syndeo each bring a pedigree and track record of aligning technology with workflows that fits NexusTek’s practice of delivering customized solutions that solve specific business needs.”
NexusTek Builds Nationwide MSP
Those deals are part of the larger NexusTek business expansion story -- which is backed by private equity owner Abry Partners. Among NexusTek's key performance indicators (KPIs) so far:
- A 2018 growth rate that exceeds 100 percent (we're checking to see if the figure represents revenues);
- More than 2,700 customer organizations served across 47 states.
- More than 300 employees (we're checking to see how many of those employees came from today's trio of acquisitions).
- Five M&A deals in 2018; and eight in the past four years.
Abry Partners Principal James Scola asserted:
“NexusTek, in executing its strategy for growth through acquisition and organic means with such alacrity, is now entrenched as the partner that small and middle-market businesses need to migrate and manage mission-critical applications in the cloud without disrupting performance."
CalNet, DCI and Syndeo -- a Closer Look
Five key items to note about the acquisitions:
- Geographic Reach: With the acquisitions of Cal Net and DCI, NexusTek inherits a presence in the Western United States. Syndeo provides reach across New England.
- Technologies: NexusTek says the deal extends its ability to create IT solutions that combine unified communications, VoIP, infrastructure, storage, virtualization, data protection, and networking technologies.
- Alliances: DCI has extensive Cisco and Microsoft Gold certifications. Cal Net was a Dell Security Partner of the year in 2015; we're checking to see if that honor involves Dell's spun-off SonicWall business.
- Reputation: Syndeo has a 98 percent customer retention rate; we're checking retention rates for Cal Net and DCI.
- Talent: Cal Net CEO James Hwang shifts to COO of NexusTek.
In a prepared statement, Hwang added:
“Synergies in company culture and vision make joining NexusTek a strategic win for all parties, especially customers. As Chief Operating Officer, I am excited to be part of an elite team that will forever alter how small and mid-size companies nationwide utilize cloud and managed IT services. Access to truly customizable solutions will allow companies of all sizes, and in all markets, to redeploy personnel and reinvest in growth.”
Private Equity Firms Invest In MSPs
Abry Partners is a familiar private equity name in the MSP sector. Indeed, the PE firm acquired Breakthrough Technology Group (BTG) in December 2017, owns a stake in Rackspace, and also helped NexusTek to recapitalize its business in December 2017.
Here's why private equity firms are investing in MSPs, several key PE firms to know, and where we're likely heading next...
