Kear IT Inc., a solutions provider in Baltimore, Md., has acquired a managed services provider in Hanover, Pa. The company also named a VP of managed services. The deal is the latest to land on the MSPmentor M&A Tracker, which highlights MSP-oriented mergers and acquisitions across the globe. Here's a closer look at Kear IT's MSP move.
Kear IT's acquisition target is Certified CIO LLC, which has clients throughout the Mid-Atlantic region. Financial terms of the deal were not disclosed. However, the acquisition has a clear goal: Accelerate Kear IT's managed services initiative -- branded as the Total Care Program.
According to a Kear IT press release:
Certified CIO's business operations, employees, and clients will be integrated into Kear IT and operate as Kear IT going forward. Following closing, Kear IT will have more than 150 customers throughout the region, including Maryland State Dental Association, the Center for Non-Profit Advancement, Levick Strategic Communications, and Sagal, Cassin, Filbert & Quasney, P.A.Steven Plumlee, president and CEO of Certified CIO, has joined the Kear IT management team as Vice President of Managed Services. In a prepared statement he said:
"Since 2005, Certified CIO has made considerable investments in our Managed IT Services portfolio, facilities and infrastructure. I’m confident that the combination of Kear IT and Certified CIO will provide immediate benefits and value to our clients while ensuring we are positioned well against competitors in the market."
Time to Sell? Time to Buy?Generally speaking, I believe the pace of MSP mergers and acquisitions will continue to accelerate -- even during the recession. As my dad always says: Everything is for sale -- for the right price. And right now, truly successful MSPs are prime targets for buyouts.
Yes, some MSPs may hold out for the hire multiples they'd fetch in a booming economy. But the M&A timing comes down to individual company goals, timing and finances.
Aside from all the long-term challenges an M&A deal can bring, there are also two short term challenges:
- Lots of "pretender" MSPs are looking to sell ... but they really don't have anything of value that would attract a suitor.
- Truly successful MSPs can't find each other and don't know how to initiate M&A discussions.
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