Two VAR500 Companies Merge; Form Managed Services Giant
Just when I was set to unplug for the night, I noticed another managed services industry merger — the second of the day. This one involves Presidio Inc. and Coleman Technologies Inc. — two VAR500 companies. The duo will combine to create a $1.1 billion Cisco-centric managed service provider that also has VMware, HP and Microsoft expertise. Here are the preliminary details plus some analysis.
According to a joint press release: Presidio (a diversified professional and managed services firm) has acquired Coleman (an IT and systems engineering services firm).
Coleman will complement Presidio’s existing business lines, including:
- Presidio Networked Solutions, a professional services and advanced IT infrastructure solutions provider;
- Presidio Managed Networks, a Managed Services and Telecom Consulting firm;
- Atlantix Global, a provider of remarketed technology solutions; and
- Presidio Technology Capital, a captive leasing operation.
Now some fast stats from the release. The combined companies…
- will have revenues of more than (U.S.)$1.1 billion
- features 70 Cisco CCIEs and 1,200 employees
- will rank as one of Cisco’s top five North American channel partners, with additional partners including VMware and Microsoft
- ranks among Cisco’s first VBlock 2 partners
Alas, I didn’t spot any M&A multiples or selling price — so it’s difficult (impossible?) to say if Presidio paid a premium for Coleman. And I must concede: I’m not familiar with either company’s profitability metrics.
Revenues Down A Bit?
At $1.1 billion in combined revenue this is a big deal — though revenues from one or both companies apparently declined in 2009. How do I know? Here’s the quick math:
- Presidio was ranked No. 91 in the 2009 VAR500, generating $947.7 million in annual revenue for 2008.
- Coleman Technologies was ranked No. 171 in the 2009 VAR500, generating $276.7 million in annual revenue for 2008.
- Quick math from the 2008 revenue figures ($947 million + $276 million = $1.223 billion) suggests one or both companies saw their revenue shrink in 2009 (since Presidio and Coleman say they have a combined $1.1 billion in revenues).
This is the second MSP-oriented merger/acquisition of the day. The other deal involved FusionStorm, an MSPmentor 100 company, swallowing CentriServ, a consulting company that specializes in client-side virtualization. It was FusionStorm’s second acquisition in recent months.