Let’s make private equity, mergers and acquisitions public

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The session at Channel Partners Conference & Expo delved deeper into the world of PE and how MSPs and Agents transact.

Pictured above, left to right: Craig Galbraith and James Anderson of Channel Futures, Rashaad Bajwa of Integris, Abe Garver of FOCUS Investment Banking, Adam Edwards of Telarus and Christopher Trapp of UPSTACK.

CANAL PARTNERS CONFERENCE & EXPO, LAS VEGAS — There was an incredible amount of Mergers and Acquisitions and partner community investment activity over the past 20 months. And, it shows no signs of slowing down. IT and Connectivity Services Industry Partners Circle, Negotiate, Buy, Sell, Exit, Negotiate, Grow and Attract Private Equity to record levels.

The level of M&A activity has MSPs, agents and technology providers across the industry putting their faces on the line. What should their next strategic move be? How can they maximize value? What are the reasons why distribution partners are suddenly so attractive? What technologies and services are fueling this trend? What are the pros and cons of all of this?

Mergers and Acquisitions and PE – Burning Questions

The panel session to Channel Partner Conference & Expo 2022 led by Craig Galbraith, Editorial Director, Channel Futures and James Anderson, News Editor, Channel Futures, answered these questions.

The panel included Abe Garver, MSP Team Leader and Managing Director of FOCUS Investment Banking, Rashaad Bajwa, CEO of Integris, Adam Edwards, CEO of Telarus, and Christopher Trapp, Founder and CEO of UPSTACK.

The M&A and private equity landscape has a lot to do with where technology is heading and how prices are determined. Investors have found the conviction, and they are not giving up.

When it comes to evaluating companies, what goes into the thinking and the process?

The importance of peers

“You have to become more outstanding to your peers in your community,” said Abe Garver. “Join a peer group. They are invaluable and can really help you improve your game. There are of course many financial parameters to consider, but getting involved in this type of community is arguably the most important aspect.

Rashaad Bajwa focuses on operational maturity and organizational values.

“That’s the differentiator,” Bajwa said. “The challenges for us are reliable recurring revenue with a good margin. We seek to be a high-end national MSP, so we are hyper-focused on corporate reputation and operations strength.

Chris Trapp mentioned the aspect of investing in entrepreneurs and corporate culture.

“It’s qualitative,” Trapp said. “You have to have a passion for what you do. The cultural component is vital for us, we prioritize it. It doesn’t matter if you’re an agent or an MSP – it’s not just about the final transaction, it’s about cultivating your culture and supporting the customer no matter what changes.

There’s also something to be said for going into a deal with your eyes open and examining every dark corner of the deal.

“When you look at valuations, before you get to that, you first have to understand the fundamentals of the economics of everything,” Adam Edwards said. “You have to watch and know everything that is hidden in the agreement. Many of these things are huge, so you have to ask yourself, “what do you want from the deal?” First answer this question, then enter the assessment.

Navigate in PE

So what’s it like working with a private equity investor? It can be a somewhat foreign concept for partners, usually entrepreneurial and independent. These offerings aren’t limited to spreadsheets and dollar signs, so how do MSPs drive smart?

“We had heard horror stories regarding the EP, so we shopped around a lot before diving anywhere,” Edwards said. “These guys are in it to make money, so they can be ruthless, brutal. A common pattern is partnership. Choosing a PE partner is choosing exactly that – a partner. When I come into these conversations, i don’t just want to know about the victories these guys have, i want to hear about the times when they ate dirt It’s easy to celebrate a win, but it’s important to find out how someone overcame a challenge If you choose the right partner, it can be magic.

Bajwa stressed the importance of choosing the right partner.

“Make sure you have a similar vision and values,” said Bajwa. “Most MSP owners are really good at running an IT business, but very in the dark when it comes to the bottom line. That’s why choosing the right partner is so important.

Related FOCUS Investment Banking News

To show that the M&A/PE machine is not slowing down, FOCUS Investment Banking (Abe Garver) broke some news on the show.

Famous ice hockey player Wane Gretzky has been quoted saying, “Skate where the puck is going, not where it’s been.”

In a timely announcement, investment bankThe MSP team has just released the first “signal-driven” predictive custom scoring of the 1,138 most important targets on the industry’s most important lists. It’s about helping private equity firms skate toward the proverbial “MSP Puck.”

Illustrative organic growth “signals” in FOCUS’ proprietary algorithm that influence ranking:

  • % growth intent (e.g. new jobs on LinkedIn, indeed, and Glassdoor)
  • Number of employees (for example, growth rate over 12 months), and
  • Web traffic (e.g. Alexa rank change over 12 months %)

FOCUS hopes its research will reduce the “frictional” cost of adding private growth capital to fuel even more growth.

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