MSP On an Acquisition Streak Highlights Industrywide Trend
For Tom Praschak, CEO of CompassMSP, acquisitions only happen when a company has three key ingredients: it agrees with CompassMSP’s vision and strategy, has a similar culture, and has leaders who fit in with the existing leadership team.
Greenpoint Business Solutions is the most recent company to match that recipe is managed IT services provider
“GreenPoint is a very client-centric company,” said Praschak, noting that client relationships have the highest value to him and CompassMSP. “Also, [Ed Galli, CEO of GreenPoint], wanted to leverage what we’ve built out as a platform to take his business to the next level.”
“Ultimately, we’re looking for companies that meet our criteria and GreenPoint happens to do that,” Praschak said.
GreenPoint is in New Jersey and has a growing footprint in the area. With the acquisition, CompassMSP will have a strong foothold there, strong customer service and more robust support. This particular acquisition has a lot to do with geography and better serving New Jersey, Praschak said.
“GreenPoint is a growing company; it’s going to be a presence here in New Jersey,” he said. “Anytime we open up a geography, I am looking to make investments and have a leader that will, in essence, help me dominate the geography that we’re going after. Ed [Galli] has that skillset.”
Praschak added that GreenPoint has “a lot of expertise in the New Jersey area, the clientele, the SMB area. They have a very diverse set of clients here, so I am looking to leverage that. As we execute our strategy, we are going more vertical; they have good expertise in the software clients are using here with vertical expertise.”
But this isn’t CompassMSPs only acquisition this year; there have been two others.
In January, CompassMSP bought the Pennsylvania-based managed IT services provider TS Tech Enterprises. TS Tech Enterprises had a client base in eastern Pennsylvania, Delaware and New Jersey, so CompassMSP considered this another geographic acquisition.
“[TS Tech Enterprises] was a business that was very client-centric, had a great culture, team environment, and was collaborative,” said Praschak.
He noted GreenPoint was similar to TS Tech Enterprises in that they both hit the three things needed for a successful acquisition, and they both represented “new geographies” for CompassMSP.
In March, CompassMSP bought its second company this year, Miami-based Dynamic Media Technologies dba IT support Miami (ITSM). ITSM covered the south Florida SMB market and Praschak referred to this purchase as more of a “tuck in.”
“We had already a regional presence in Miami,” he said. “But we found a business that could fold in nicely with our regional operation in Miami.”
The buyout of GreenPoint is the third in 2019 alone — CompassMSP also has made five other acquisitions since 2017.
“When I do acquisitions, I have two objectives,” Praschak explained. “To never lose a client as a result of an acquisition and to never lose an employee — and I’m happy to say we haven’t so far.”
So what’s the strategy behind buying this many companies?
“Our strategy is to grow organically and inorganically,” Praschak said. “Inorganically, I’m looking for a couple of things … One is geographical expansion. Typically we start a new geography with an acquisition. The second thing is strategic skills that I can bring in and leverage in other regions as well.”
He noted that the acquisitions of the Pennsylvania and New Jersey companies were “primarily geographical” as well as based on …