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August 22, 2023
Gallant Capital Partners’ recent strategic investment in two MSPs – one based in the U.S. and another in Canada – combines two leading cybersecurity platforms in a move that aims to expand the companies’ customer base throughout North America.
DynTek, with headquarters in Irvine, California, and 11 locations across the U.S., is an MSP and MSSP with a strong focus on Microsoft security solutions. rSolutions, with a wide presence across Canada, is a cybersecurity MSP/MSSP focusing on Splunk technologies. Splunk was traditionally aimed at enterprise clients, while Microsoft traditionally played in mid and smaller markets, although both have plenty of crossover. Both MSPs deploy a variety of other security solutions, with some overlap in second-tier products.
Now, under a new unified leadership structure, the companies can both deliver the two platforms to Canadian and U.S. clients, depending on their preference and legacy systems. The combined client base of both companies is broad, with strength in state, local and federal governments; K-12; health care; financial; utilities; hospitality and gaming.
“Bringing those [security stacks] together, we can deliver a stronger offering and stronger customer experience. That’s very important to us,” said Paul Kerr, the new CEO of both companies, which will retain their separate names. “I think a big component of this is also sales and marketing. You’ve got to get out there, have conversations and be at the table. If we can get to the table with any customer, we have a really strong chance to compete and win.”
Kerr knows a little bit about that. He founded Scalar Decisions, a full-service MSP, in 2004, eventually acquired five more, and grew the company to C$250 million before selling to CDW in 2019. He was working as a consultant for Gallant, including on this deal, before becoming CEO at DynTek. Prior to that, Kerr spent two years getting the deep dive on cloud and cloud-based security as vice president of partners at Google Cloud Canada. Kerr said that experience will serve him well in his new role, which he describes as a “sales-led CEO.” He also acknowledges how fortunate he is to have a large, strong team behind him.
Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup.
“Technology has certainly changed in the last three years, and the people at both organizations have that mindset, in that what was relevant three years ago may not be the hot technology today. But from a security perspective, the problems have largely stayed the same,” he said. “Customers need to continue to increase their posture overall. Nomenclature changes and marketing changes, but there are a lot of similarities from when I left.”
The companies, Kerr said, have the resources to take cybersecurity services to the next level. They have access to three SOCs, as well as three former CISOs and two former CIOs at rSolutions, plus DynTek’s engineers. Tim Montgomery, DynTek’s former CEO, will take on a board position and remain active in the day-to-day operations. Richard Baker, rSolutions’ former CEO, will continue working closely with customers and evangelizing the need for full cybersecurity solutions. They and other members of the companies’ executive leadership teams will remain material owners of the companies. This is the first investment Gallant Capital has made from its second fund, Gallant Capital Partners II.
“We want to continue delivering the traditional IT architectures to customers, the things that DynTek has done for 25-plus years. There’s been big growth in the security space, so this is also about building a center of excellence around security,” he said. “I often say the reason you go into a customer and what you sell them are often two different things. We may go in and talk about something traditional that we’ve done for them, but one of the top priorities on customers’ minds today is, ‘How do I get more secure?’”
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Jeff O’Heir is a journalist and editor who has spent much of his career covering the business leaders, issues and trends that define the IT and consumer technology channels. His work in print, online and on stage has showcased, educated and connected small and large solution providers, MSPs, channel pros and vendors. During his career, Jeff has also covered engineering technologies and breakthroughs, crime, politics, food and the arts.
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