CSPs, Mergers and Acquisitions, MSP

PCM Acquires Microsoft Cloud Partner, MSP: Stratiform

PCM Inc. (NASDAQ:PCMI), one of North America's largest IT solutions providers, has acquired Stratiform Inc., a Microsoft-focused MSP and IT consulting firm that specializes in Azure cloud, Office 365 and enterprise mobility offerings.

PCM purchased Stratiform for C$2.1 million up front plus a potential C$1.75 million over a three-year earn-out period. That potentially brings the total deal to about C$3.85 million -- or roughly 0.7 times Stratiform's annual revenues of C$5.5 million for fiscal year ended July 31, 2016.

In U.S. dollars, the deal is worth about US$2.87 million (if earnout targets are met) on annual Stratiform revenues of about US$4.1 million, based on recent exchange rates. EBITDA figures were not disclosed so ChannelE2E can't calculate the deal's EBITDA valuation.

PCM Purchases Stratiform for Cloud Services

According to a prepared statement:

"PCM expects Stratiform to serve as a cornerstone to PCM’s strategic cloud and related solutions offerings and to quickly leverage its leading cloud expertise in Canada into the United States and other new markets, strengthening PCM’s established leadership position as a key differentiator in the IT marketplace. The acquisition deepens PCM’s relationship with Microsoft and other best-of-breed technology companies, and increases PCM’s reach into SMB, Mid-Market, Enterprise, and Public Sector markets throughout North America."

This is the latest in a growing list of PCM moves to evolve from the company's former PC Mall brand. The evolution looks and sounds promising. The company generated net sales of nearly $2 billion during the 12 months ended June 30, 2016 -- up from $1.5 billion in the 2013 timeframe. The company stock has climbed sharply in recent years as well -- moving From a 52-week low of $7.48 to a recent price of $22.05.

PCM plans to further discuss the Stratiform deal during the company's next earnings call, PCM said. The call is set for February 16, Yahoo Finance indicated.

Multiple IT Service Provider Acquisitions

Multiple VARs, MSPs and CSPs completed buyout deals as 2016 gave way to 2017. Among the deals that surfaced in recent days:

Complete M&A Coverage: Track all VAR, MSP and CSP mergers and acquisitions by visiting the ChannelE2E Milestones section daily.

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.