Managed Services M&A: All Covered Seeks Growth to $1B

Managed Services M&A: All Covered Seeks Growth to $1B

What makes a good managed services acquisition? All Covered, part of Konica Minolta, is sharing tips with managed services providers (MSPs) at Schnizzfest right now in Philadelphia. Over the long haul, All Covered has lofty growth aspirations -- somehow maybe becoming a $1 billion MSP with international reach. But that's a really big long-term goal. What's near-term on the MSP front? Here's a live blog. Check back often for multiple updates.

On stage: Bruce Teichman, director of corporate development, All Covered (pictured). Gary Pica, CEO of TruMethods, is conducting the interview.

The blow-by-blow: All Covered now has 700 employees. The company has acquired 25+ MSPs. In terms of M&A targers, All Covered considers:

  • Service vs. reseller revenue is super-important.
  • MSPs need to drive more services revenues than product revenues. Plus, All Covered needs to understand the MSPs' various services revenues: project services, block time break fix or pure managed services?
  • Trajectory: Is the MSP growing or has it had flat growth historically?
  • The longer the MSP has been growing consistency the more confident All Covered is to make an offer.
  • Culture: What is the CEO and executive team? If the owner is a kook, All Covered typically moves on...
  • Valuations: Based on revenue? Sales? EBITDA? What's it based on? All Covered's reaction: A big driver is the financial at the bottom line, EBITDA. What's the real profitability, and what's it going to be under All Covered Ownership?
  • None of All Covered's nine most recent acquisitions were looking to sell.
  • All Covered wants to be the largest MSP on the ocean, but thinks there's room for many boats on the water. Teichman mentioned a big, hairy, audacious revenue goal of $1 billion over the long haul, with potential international aspirations as well.
  • The latest All Covered acquisitions are all-cash deals. "Cash is king." (MSPmentor does not know if that's all up-front or part of a multi-year earn-out.)
More updates coming

TAGS: Financing
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