MSP Acquisitions: One Deal, More Coming?

MSP Acquisitions: One Deal, More Coming?

Managed Services Mergers AcquisitionsHorizon Data Center Solutions of Dallas has moved into the managed services market by acquiring Mareechi. Elsewhere, additional MSP-oriented acquisitions could be coming, according to buzz at last week's 2009 HTG Summit and peer group meetings. Here's the scoop.

Terms of the Horizon-Mareechi deal were not disclosed, but the combined businesses create a global MSP with an anticipated $20 million combined 2009 revenues, according to a Horizon press release. This is the fourth MSP-oriented acquisition to land on our MSPmentor M&A Tracker so far in 2009.

According to the Horizon press release:

The acquisition by Horizon provides Mareechi clients, including major Dallas businesses like Hunt Capital Group and Pizza Hut Park, with immediate access to Horizon’s mission critical data center and business continuity services. In addition, Horizon’s data center clients, which include Fortune 100 and other organizations such as Dallas-based Children’s Hospital and the Army & Air Force Exchange Service, now have the option to expand their services with Horizon into the hosting and application management areas, which may generate significant cost savings on IT overhead.
The release also says:
Horizon brings to the table a top tier portfolio of audited data centers that have generated significant new business at a rate almost counter-intuitive to this economy. The acquisition of Mareechi gives Horizon a large managed services customer base that now has access to co-location and data security.
Still, I'm always cautious about high-tech M&A activity. Most of the deals I've tracked over the years don't deliver the promised "synergy" because of culture clashes or lack of immediate, definitive leadership after a deal is signed.

New Week, New Deals?

Meanwhile, more deals could be coming. During the 2009 HTG Summit in Dallas last week, Heartland Technology Solutions CEO Arlin Sorensen mentioned that he's hearing more and more reports from cash-strapped VARs and aspiring MSPs that are seeking to sell their businesses during the recession.

Also during the HTG Summit, Manage to Win CEO David Russell described how MSPs and solutions providers can raise their valuations through effective talent strategies.

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