Funding for the merger came from capital previously provided by Kayne Partners, along with additional debt financing from CIBC Innovation Banking. CareWorx raised $17 million from Kayne back in March 2018.
CareWorx CEO Mark Scott
Fully Managed Director Sharleen Oborowsky
IT Glue CEO Chris Day
Several key MSP industry veterans are associated with both companies, including:
IT Glue CEO Chris Day, an investor in Fully Managed;
Yogapedia CEO Sharleen Oborowsky, a director and co-founder at Fully Managed; and
CareWorx CEO Mark Scott, formerly CEO and co-founder of N-able Technologies, which SolarWinds acquired around 2010.
The combined company, called CareWorx Fully Managed, has 270 employees across three business divisions:
Managed Services (Fully Managed);
Enterprise Service Management (MSPWorx); and
Senior Care (CareWorx).
The MSPWorx business division has been particularly active ahead of the M&A deal. The company build a multi-tenant version of ServiceNow, and launched a midmarket partner program in September 2019.
CareWorx Fully Managed Executive Team
To manage the combined businesses, Scott shifts to CEO of the overall company. And Fully Managed CEO Joel Abramson is now EVP & GM of the Managed Services division. Day joins as a board member of the combined business.
In a prepared statement, Scott said:
“We believe this is an incredible opportunity to build the first true MSP platform company with the scale, capital and, most importantly, an incredible and experienced team to do it. We are creating an ‘MSP unicorn’ – one that can accelerate rapidly through both organic growth and acquisitions, while re-defining our customers’ experience in today’s as-a-Service world!”
Fully Managed CEO Joel Abramson
“Having spent almost a year on the merger, I’ve had the opportunity first-hand to witness our synergies – we share a common approach to both managed services and the concept of digital transformation. Ultimately, I see an alignment of great people on both teams, committed to a common vision of simplifying technology for our customers.”
Concluded Day: “It will be exciting to see what we can do with our business. An MSP that can combine ‘Rule of 40’ recurring revenue organic growth with market consolidation is a game-changer.”
An MSP and the Rule of 40
The “rule of 40” is a common term among SaaS-focused businesses. It means your company’s growth rate plus its profit margin should add up to 40 percent. So if you’re growing revenues 25 percent annually, you should be generating at least 15 percent profit margin to meet the rule of 40’s definition.