Mergers and Acquisitions, MSP

Big MSP Acquisition: Cal Net Buys inhouseIT

Cal Net Technology Group has acquired inhouseIT, essentially combining two of California's most successful MSPs, two sources close to both managed services providers tells ChannelE2E. An official announcement could come as soon as this week. ChannelE2E has reached out to both companies for comment but has not directly confirmed the deal with the MSPs.

> Updated July 29, 5:00 p.m. ET: Cal Net CEO James Hwang and executive team members explain the inhouseIT acquisition to ChannelE2E

Cal Net Technology Group provides outsourced IT, cloud, security and unified communications solutions for organizations throughout the Los Angeles and Orange county areas, particularly small and medium sized businesses with 10 to 2000 employees. inhouseIT, meanwhile, is a ShoreTel and Office 365 partner that's known for incubating its own startups/spin-offs and disrupting markets long before traditional VARs and resellers spot industry inflection points.

Assuming this deal is official, I suspect Cal Net and inhouseIT now rank among the U.S. West Coast's top independent MSPs.

Cal Net: Funded and Growing

James Hwang
James Hwang

Cal Net is backed by Olympic Valley Capital and Boathouse Capital, which invested in the MSP in November 2013. That financial backing has helped Cal Net to make multiple acquisitions -- including:

  • Alpha Actual, cloud-based IT services and document management, November 2015;
  • Velocity Network Solutions, southern California IT support, January 2015; and
  • the inhouseIT acquisition.

Cal Net in June announced James Hwang as its new CEO.  At the time, the company was managing 500 customers on a day-to-day basis, while supporting about 1,500 customers across Southern California on an annual basis. Hwang previously was executive VP of Cal Net. Earlier in his career, he was regional VP and GM of HP's central U.S. storage and converged infrastructure efforts.

inhouseIT, meanwhile, is a seasoned MSP that has also launched spin-off companies from time to time. Successful launches include SpamSoap (SaaS email security), which evolved into Nuvotera (SaaS distribution). Excel Micro acquired Nuvotera in February 2015.

ChannelE2E will update this coverage as more information becomes available.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.