M&A: Prominent Master Managed Services Provider Acquired

For the third time in roughly a year, ClearPointe has made a managed services-related acquisition. The latest deal involves Do IT Smarter, a well-known Master MSP in San Diego. Will Do IT Smarter President Lane Smith and his peers stick around under ClearPointe ownership? And what will become of the Do IT Smarter brand? Here are some clear answers, according to prepared statements from Do IT Smarter and ClearPointe.

According to a prepared release,

“Do IT Smarter will continue to operate under the same business name and the Do IT Smarter executive management team will continue to manage operations for this segment of the business. ClearPointe executive Tom Allen will oversee the delivery of these services through ClearPointe branch offices located in San Diego, CA, Dallas, TX, Rogers, AR and Little Rock, AR.  Services optimized for upper mid-market customers will continue to be based at ClearPointe’s corporate headquarters in Little Rock.”

Translation: Lane Smith will continue to run Do IT Smarter‘s master MSP efforts. Financial terms of the deal were not disclosed.

This is ClearPointes‘s third acquisition in roughly a year. The others involved:

• TecWatch, a Dallas-based provider that ClearPointe snapped up in October 2009
• Savant Technologies, which ClearPoint acquired in January 2010.

According to a prepared statement from Jeff Johnson, president and CEO of ClearPointe, the company has generated “double digit business growth for the past few years.”

Do IT Smarter’s Focus

So what exactly does ClearPointe gain by buying Do IT Smarter?

Simply put, Do IT Smarter is a Master MSP — which assists VARs and aspiring MSPs with the transition to managed services. Do IT Smarter’s offerings include remote management services, help desk services, and managed security services.

A few years ago, MSPmentor expected the Master MSP market to be quite large. But some aspiring Master MSPs found it too expensive to recruit and transform VARs into MSPs. Still, there are a number of Master MSPs that continue to work across the industry. Noteworthy examples beyond Do IT Smarter include Ingram Micro Seismic, Virtual Administrator, MSP Services Network and Cloud Services Depot. By the way, MSP Services Network changed ownership in 2009, when an investor entity led by Gerard Kane acquired the company.

Meanwhile, master MSPs face intensifying competition in some market niches. For instance, companies like NetEnrich and Zenith Infotech have been applying price pressure and economies of scale in the help desk and NOC (network operations center) services markets.

More MSP M&A activity seems to be approaching. In one prime example, All Covered CEO Todd Croteau says his company will likely make two MSP-related M&A deals over the next few months, and as many as 50 deals over the next three years.

Sign up for MSPmentor’s Weekly Enewsletter, Webcasts and Resource Center. And follow us via RSS,Facebook, Identi.ca; and Twitter. Plus, check out more MSP voices at www.MSPtweet.com.