In the latest managed services merger, outsourceIT and Bald Eagle Technologies are combining forces to offer small business customers help desk, managed services, CIO, infrastructure migration, virtualization, security and complete hosting services, the two companies say. Here's a closer look at the deal and the broader market for MSP mergers and acquisitions.
Back in February 2010, outsourceIT President and CEO Craig Guice told MSPmentor Webcast attendees that he was mulling some M&A possibilities. His company has been in growth mode: outsourceIT was ranked No. 47 in our 2010 MSPmentor 100 report.
Apparently, Guice found his M&A target in Bald Eagle Technologies. According to a prepared statement from Mike Linville, founder and CEO of Bald Eagle Technologies, "This combination is an exciting time for our employees as well as our current and future customers as it expands our resources and provides the needed scale to better service our customers."
Linville will join the Board of outsourceIT and be involved in the integration of the two companies and he'll provide strategic guidance to the management team.
Translation: It sounds like the merged companies will focus completely on the outsourceIT brand, while Guice continues to run day-to-day operations and the overall business. The company will operate from its two technology centers in La Plata, Md. and Winston-Salem, N.C., according to a prepared statement.
I've reached out to Guice and Linville for further perspectives on the deal. Financial terms were not announced.
Mixed M&A Market?Meanwhile, M&A activity seems mixed at best in the managed services market. During Q1 of 2010, MSPmentor tracked numerous M&A deal. In more recent months, I've heard from a few Master MSPs that are talking about arms-length business relationships. But there certainly hasn't been a flurry of M&A deals, mostly because of the usual reality: There are plenty of potential sellers but too few buyers.
Still, there are anecdotal signs of industry consolidation. Consulting firms such as Cogent Growth Partners and Weaver & Associates (led by MSPAlliance Founder Charles Weaver) seem to be talking with a range of MSPs behind closed doors about possible M&A engagements and related strategies.
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