TekLinks has acquired ClinicAnywhere's managed services business (formerly called ETG). The deal gives TekLinks, an MSPmentor 501 and CRN Tech Elite 250 company, deep health care IT expertise. ClinicAnywhere, meanwhile, continues forward as its own company — focused on medical billing and practice management software. ClinicAnywhere CEO Mike Jones and TekLinks VP David Powell discussed the details with MSPmentor. Here's the background.

To understand the potential upside for this deal, it's important to understand each company's history:

The TekLinks-MSP deal sounds like it was a few years in the making. “We kicked the tires with TekLinks a couple times over the past few years,” said Jones. “We always felt like it made a lot of sense. But for one reason or another — in terms of timing on our side or on their side — it just didn't work out until now.”

CEO Introductions

Somewhere in mid- to late-2012, former TekLinks CEO Stuart Raburn (still on the company's board) set up a meeting to help Akerhielm and Jones get to know each other, recalls Jones. Meanwhile, TekLinks' David Powell had previously worked with Jones so there was built-in trust among both parties.

“David [Powell] is unique situation since he has history with us,” said Jones. “Jim [Akerhielm] is a guy who I got to know during this process. And as you know there are a lot of moving parts to getting this done. At every point, Jim treated me with complete respect and was nothing but straight-up during all the negotiations. When you have a foundation of history and trust, it's a pleasure to work this type of deal.”

Early in the discussions, Jones' potential long-term role at the combined company wasn't clear. But Jones also knew that his MSP business needed to solve the cloud question.

“Everyone is at a cross-roads at the cloud,” said Jones. As an MSP, “you'll adapt and find the right partnership or find the right strategic alliance — or you'll suffer the consequences. Looking at building out a data center was not an option for us. We didn't have all our bullets in the gun if we didn't find the right solution. TekLinks had the solution. It's a rare case where it's a win for everyone.”

Indeed, TekLinks already had a cloud business that was in growth mode. Eventually, the two sides agreed that Jones would assist with MSP transition into TekLinks but his long-term focus would be on the separate company, ClinicAnywhere.

Disclosures and Due Diligence

When it became clear that a potential deal looked very possible, Jones permitted TekLinks to interview his top 10 MSP customers, along with 5 other customers (selected by TekLinks) from a top 25 clientele list. Customer feedback came back positive — which is hardly surprising, since Jones' average customer has been on board for 59 months. Plus many of ClinicAnywhere's MSP customers were already running some cloud services with TekLinks.

Jones also looped in its staff as the official deal approached. “We were transparent with our staff all along,” said Jones. “This deal gets them upward mobility while becoming part of a larger organization.”

TekLinks' Strategy

TekLinks will leverage the deal to build an even deeper footprint in medium and large health care environments.

“The upside for us is in the service delivery model,” said TekLinks' Powell. “[ClinicAnywhere's MSP business] is much more hands-on, high-touch than we have traditionally employed. In theory we can go into other high-touch markets like legal services. The opportunity for us is to build on the best of what they had historically, plus what TekLinks has as a cloud offering.”

“When we were doing the due diligence calls, it was more like confirmatory diligence,” said Powell. “During every single call the customer was able to articulate [ClinicAnywhere's MSP] value proposition. They company has the right vertical market expertise. The right industry association relationships.”

But once Jones exits the MSP business and focuses full-time on ClinicAnywhere in about three months, will TekLinks retain that deep vertical market expertise?

TekLinks has already found an answer to that riddle. And it's an impressive one. Stay tuned for those details — which have yet to be publicly announced.