Presidio Acquired By Private Equity Firm BC Partners

IT solutions provider Presidio has been acquired by private equity firm BC Partners for $2.1 billion, including Presidio's net debt, the companies confirmed this morning.

The deal is expected to close by the fourth quarter of 2019, at which time Presidio will go private. However, the agreement include s a 40-day "Go Shop" period -- allowing Presidio to accept a more lucrative offer if such a deal surfaces.

Presidio has been publicly held and also backed by Apollo Global Management, another private equity firm. The IT solutions provider -- a close Cisco Systems, Dell EMC and VMware Cloud on AWS  partner -- has pushed hard in recent years into the MSP, cybersecurity and digital solutions markets. In fact, Presidio now ranks among the world's Top 100 MSSPs, according to MSSP Alert.

The deal continues a private equity spending spree across the IT channel -- as investment firms snap up IT solutions providers, managed IT service providers (MSPs) and consulting firms that have cloud, digital and cybersecurity expertise.

BC Partners Acquires Presidio: Executive Perspectives

In a prepared statement about the deal, Presidio CEO Bob Cagnazzi said:

Added Fahim Ahmed, lead deal partner of BC Partners:

Concluded Raymond Svider, partner and chairman of BC Partners:

BC Partners Acquires Presidio: Company Timeline

Presidio has evolved its business organically and via M&A (mergers and acquisitions) in recent years. Recent highlights from the company timeline include:

Private Equity and IT Solutions Providers: Next Moves

Presidio is the latest in a growing list of IT solutions providers acquired by private equity. And the deal pipeline will remain strong for at least the next few months, barring a major economic slowdown, ChannelE2E believes.

Private equity firms have billions of dollars in "dry powder" -- money raised from investors -- that has to be put to work over the next few months. The financial stockpiles have triggered strong M&A across the MSP sector, as investors seek to find recurring revenue alternatives that are less costly than pure SaaS companies.

Still, ChannelE2E does worry about a potential market correction involving private equity and MSPs. Valuations have surged amid the investment frenzy, and some private equity firms are discovering that scaling MSPs and IT solutions providers is far more difficult than scaling pure SaaS businesses, ChannelE2E believes.

Those ChannelE2E concerns don't necessarily pertain to the BC Partners-Presidio deal, but we continue to watch the private equity market closely for signs of a potential valuation correction in and around the IT solutions provider sector.