Private Equity Firm Preps Major Managed Services Investment

Apparently, Zenith RMM's spin-out from Zenith Infotech may be the start of a bigger managed services M&A trend. Consider this: Within the heart of the managed services market, a venture capitalist/private equity firm is expected to make a major investment -- in a well-known MSP-oriented company -- in the next two weeks or so, according to a trusted MSPmentor source. The source says the private equity investment will likely be more significant than today's Summit Partners investment in Zenith RMM, which spun out of Zenith Infotech today.

Another major industry deal is "due to close within two weeks," said one source. "So we will know soon. And it is a VC/PE transaction...This quiet little corner of IT [managed services, that is] seems to be heating up, for sure. It was bound to happen. It has been one of those nascent IT market segments showing some promise that it can make the leap into adulthood."

The source added:  "Clearly, as an industry we are very much contributing to huge gains in productivity in the SMB world so its natural that it will have an impact on other parts of the IT industry. There is no doubt our market segment has some growing to do before it can become truly mainstream in the enterprise IT space. That is our challenge. And the stakes are high."

The source, an influential person who has helped MSPs to chart their strategies, says he sees "lots of money" jumping into the managed IT market.

Where will the money flow next? Apparently, a major answer will surface within the next few weeks.

TAGS: Financing
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