Several more managed services provider (MSP) mergers and acquisitions are now official. If you look closely at some of the deals, you'll notice Cogent Growth Partners advising on quite a few of them. Recent examples involve Cogent offering guidance on Seattle Computing's merger with Active Computer, and Altuscio Networks' merger with IT Consulting Group in Atlanta. Both deals were announced in January 2012. So, how is Cogent Growth Partners carving out an M&A consulting niche for itself?
I've got a few educated guesses:
- For starters, Cogent Growth Partners has a clearly defined, narrow niche.
- Cogent only advises buy-side MSPs. In other words, Cogent avoids the temptation to play both sides of the table, and never advises sell-side companies.
- Cogent has been known to respectfully decline consulting engagements that involved questionable M&A deals. If Cogent doesn't see potential synergies in the deal, the consulting firm typically does not engage the opportunity.
- Cogent sticks around post M&A, to assist the buy side company with M&A best practices and execution.
- Cogent's team includes former MSPs, such as Managing Partner David Schafran.
For most small business entrepreneurs, the M&A process can be overwhelming and a major business distraction. Find a good consultant to assist the process, and you can speed each stage -- initial negotiations, letter of intent, discovery, final terms, closing, etc.
Within the MSP market several companies offer M&A consulting services. In addition to Cogent Growth Partners, firms like Weaver & Associates (run by MSPAlliance President Charles Weaver), Martin Wolf Securities and 4-Profit advise on M&A engagements.
Side note: Thanks to Cogent Partner George Sierchio for the background on the recent M&A deals. Sierchio joined Cogent earlier this year.