London-based IT services provider Computacenter is acquiring Toronto, Canada’s Pivot Technology Solutions for roughly CDN $105.8 million - or roughly US$80 million. The valuation is just below 4X Pivot's 2019 profit before taxes, according to ChannelE2E estimates.
This is M&A deal 362 that ChannelE2E has covered so far in 2020. See the full M&A deal list here.
Roughly 85 percent of Pivot's revenues come from customers in the United States, with the remainder in Canada. The IT solutions provider employs around 600 people in the United States and 100 in Canada. Pivot’s customers are generally large enterprise organizations, most of whom operate from the west coast, central, and south east US regions.
Computacenter says it intends to integrate its existing US operations with Pivot, which will nearly double both its revenue and headcount in the country and significantly increase its coverage and capability.
Senior leadership in Pivot is expected to remain and play a key role in the combined Computacenter business, the buyer said. This includes Kevin Shank, Pivot president & CEO, who has worked in partnership with Computacenter in a previous role, and David Toews, Pivot CFO.
Pivot reported a statutory profit before tax of US$20.7 million on a reported revenue of US$1.2 billion at the end of 2019. The company saw a 28 percent decline between its second fiscal quarter of 2020 and that of 2019.
Computacenter Acquires Pivot: Scaling the Organization
Mike Norris, Computacenter Group CEO, commented:
“We are pleased with our progress in the US, including the acquisition of Fusionstorm in 2018. The acquisition of Pivot represents an opportunity to increase our scale, geographic footprint, and capabilities in US. Additionally, Canada expands our total market opportunity and helps us meet the needs of international customers. The businesses are a good fit and the combination gives us the opportunity to enable the long-term success of customers, partners and people from both teams.”
Kevin Shank, Pivot President & CEO, said:
“Computacenter’s strong US and global organization, along with its robust and industry leading services portfolio, make it a great fit for Pivot’s US and Canadian businesses. The merging of the US businesses allows us to scale the organization and better support our existing and new clients. We believe that Computacenter offers a secure long-term future for our businesses and an exciting opportunity for our people.”
Computacenter’s US Push
This deal represents Computacenter’s first significant move into the US IT market since its late-2018 buyout of FusionStorm.
That acquisition provided Computacenter with a full range of services to offer to its US customers while increasing its employee headcount by 50 percent.
In 2017, the company also acquired ServiceNow Gold Services Partner TeamUltra.
