Private equity, Enterprise, Content

ConvergeOne Up for Sale Amid Private Equity Buyer Interest?

ConvergeOne is exploring a potential sale after the IT service provider attracted buyout interest from private equity firms, Reuters reported today. ConvergeOne's current valuation is about $700 million.

Clearlake Capital Group LP is ConvergeOne's majority owner. Raymond James Financial Inc. is managing the auction process, according to the report.

ChannelE2E has not independently confirmed the report.

The buyout rumors come less than a month since ConvergeOne acquired Advantel Networks to extend its managed services reach across the West Coast.

ConvergeOne Business Focus, Size, Financial Metrics

ConvergeOne has more than 10,000 customers, including 62 percent of the Fortune 100 and 48 percent of the Fortune 500. The company’s revenues were $391 million for its Q2 2018 ended in June. Collaboration revenue ($257.2 million) represented nearly 66 percent of that total. The company had a GAAP net loss of $7.5 million for the quarter.

Organic year-over-year revenue comparisons are somewhat tricky to track since much of ConvergeOne’s growth has involved M&A deals. Indeed, Advantel is ConvergeOne’s 18th acquisition since 2005.

In February, the firm bought Arrow Electronics’ Systems Integration business, which specialized in unified communications, contact center, and voice and data technologies.

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.