Managed Services Acquisition: Trivalent Buys Innovative Software Strategies

Managed Services Acquisition: Trivalent Buys Innovative Software Strategies

Larry Andrus (pictured) made good on his word. As CEO of Trivalent Group, an MSPmentor 100 company, Andrus hinted in February that he was preparing to make another managed services acquisition. Now, details of the deal have emerged. It involves Trivalent Group, a $22 million MSP in Grandville, Mich., buying Innovative Software Strategies (ISS) of a Battle Creek, Mich. Here's the update, including a list of more than a dozen MSP-related mergers and acquisitions that have occurred so far in 2011.

First, a look at the Trivalent-ISS deal. According to a prepared statement:

"Founded in 1993 by Amy Lenz, ISS has developed deep roots in Southern Michigan and the Battle Creek area. The firm provides managed services, disaster planning, prevention and protection, IT consulting, software development, health care IT, and hosting services. Serving the health care, food processing, and commercial industries, the ISS customer base will become part of the Trivalent network, adding more than 75 accounts to Trivalent’s client portfolio. As part of the acquisition, Trivalent will maintain a branch office at the current ISS location, 49 S. Cass St., Suite 3A Battle Creek, MI 49037. Trivalent will also add all six ISS employees to its team.
Trivalent CEO Larry Andrus hinted to MSPmentor in mid-February that his company was preparing to make another acquisition. According to a prepared statement, the ISS deal is "part of Trivalent’s long-term growth strategy and commitment to remaining a Michigan-based company. Between 2003 and 2008, the eight-year-old firm acquired seven technology companies throughout the state, including the original Trivalent, ACCN, CD&H Support Services, Entre of Mt. Pleasant, Reiughes, Remex Corporation, and iQ Consulting. Today, Trivalent’s team of 65 professionals serves more than 1,000 businesses statewide from its Grandville headquarters and offices in Mt. Pleasant, Kalamazoo, and now Battle Creek."

Financial terms of the Trivalent-ISS deal were not disclosed.

More than a dozen MSP-related mergers and acquisitions have occurred so far in 2011. Other deals have involved:
  1. eCommerce Industries acquired FMAudit for managed print services expertise
  2. Peak Uptime acquiring eMonarch
  3. mindSHIFT acquiring ORBIT
  4. Carousel acquiring OmniPresence
  5. Fraser Advanced Information Systems buying PennLantic Corp.
  6. Ancero acquiring Integrated Network Consulting Inc.
  7. Netgain acquiring DLP Technologies
  8. Microholdings US acquiring ConnectIT Networks Inc.
  9. Konica Minolta acquiring All Covered, a national MSP that plans continued acquisitions
  10. Printelligent acquiring DirectPointe’s managed print services business
  11. Fully Managed acquiring HIT Business Solutions as part of a Canadian expansion plan
  12. mindSHIFT acquiring Alpheon
Also of note: DirectPointe, based in Utah, has put its $8.2 million managed services provider business up for sale, MSPmentor learned. MSPmentor is still trying to determine if DirectPointe has received any bids for the MSP practice.

Despite all the M&A activity, it's important to keep market consolidation trends in perspective. I suspect there are about 10,000 to 15,000 really successful MSPs worldwide, with thousands of additional VARs and MSPs moving into the managed services market. Those large numbers provide a healthy reminder that thousands of MSPs remain independent among all the M&A chatter.

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