Mergers and Acquisitions, Mergers and Acquisitions, IT distribution, IT management, MSP

ImageNet Consulting Acquires Florida MSP PC LAN Techs


Managed services company and independent office equipment dealer, ImageNet Consulting, has acquired PC LAN Techs, a Florida-based MSP. Financial terms of the deal were not disclosed.

This is M&A deal Number 126 that ChannelE2E has covered so far in 2020. See the complete M&A deal list here.

This deal is ImageNet Consulting’s second acquisition of the last six months. The company previously bought fellow Oklahoma City-based company IT Guys.

Zygoquest, a merger and acquisition advisor heavily active in the office equipment market, advised PC LAN Techs on the deal, as it has with similar acquisitions.

About PC LAN Techs

Headquartered in West Palm Beach, Florida, PC LAN Techs was founded in 2001 by Johannes Csonka. The company’s entire technical staff will remain on board as, over the next year, it slowly transitions its name and services under the ImageNet Consulting Brand, the firm announced.

John Franklin, who served as IT Services Manager at PC LAN Techs, will lead the team as services manager under the new banner, the company said.

ImageNet was founded in 1956 as Southwest Typewriter Company. In the early 2000s, the firm began providing managed services and has expanded its managed IT services to local areas in recent years.

ImageNet is partnered with Canon, HP, Konica Minolta, Kyocera, Samsung, and more. The company has a number of offices in various cities across six different states.

Zygoquest’s Mike Dudek and Rich Wisniewski served as advisors to PC LAN Techs. Zygoquest has advised on dozens of deals over recent years. Prior to founding Zygoquest, Mike Dudek was Vice-President of Acquisitions for IKON Office Solutions, a $5.5 billion NYSE company acquired by Ricoh Corporation.

Managed Print Services M&A

Office equipment dealers have been pushing into the MSP sector in recent years as they seek diversified recurring revenue streams. Much of the effort has involved M&A deals.

Here's an ongoing list of M&A deals involving office equipment dealers and managed print services (MPS) partners.

Meanwhile, M&A valuations can vary widely for both office equipment dealers and managed IT service providers. Most MSPs — which tend to have heavy recurring revenue — are selling for about 4X to 8X annual EBITDA, ChannelE2E believes.

The multiples tend to be 4X to 6X for all cash up-front deals. The higher valuation deals often involve pure recurring revenue, healthy EBITDA profit margins (15 percent plus) and performance-based earn-outs over a year or two, according to ChannelE2E conversations with M&A participants. In rare cases, top-notch MSPs can fetch 10X annual EBITDA valuations.