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Private Equity Acquires MSP: M/C Partners Buys West Monroe Division

Private equity firm M/C Partners has acquired a managed IT services provider (MSP) division from West Monroe Partners, and Wayne Kiphart is now CEO of the MSP business. Financial terms of the deal were not disclosed.

This is M&A Deal Number 16 that ChannelE2E has covered in 2020. See the complete M&A deal list here.

Private equity activity in the MSP space has been especially active in recent days. Buyers and investors include Frontenac and One Equity Partners, ChannelE2E reports.

M/C Partners Acquires West Monroe's MSP Division: Deal Background

West Monroe Managed Services primarily serves small and mid-size businesses. The MSP has more than 50 customers and 100 employees. Kiphart joins the MSP business from Gratia, a cybersecurity-focused MSP. He was previously president of OnX Managed Services, and VP of managed services at Logicalis.

M/C Partners has extensive experience owning and building MSPs. The private equity firm previously invested in Thrive Networks, Involta, Ensono, Fusepoint, Attenda, Denovo, Carbon60 and others, M/C Partners notes.

The private equity firm has invested more than $2.2 billion of capital into over 130 companies. M/C Partners' investment targets typically are companies with enterprise values of $25 million to $250 million, the PE firm says.

M/C Partners Acquires West Monroe's MSP Division: Executive Perspectives

In a prepared statement, CEO Wayne Kiphart said:

“I am excited to join the talented team at West Monroe Managed Services and to lead the company in this next chapter of growth. Our focus will continue to be on driving the highest satisfaction for our customers – some of whom have been customers for over 10 years – through additional investments in service delivery and IT capabilities. Over the next few months, I will spend considerable time with our customers to better understand their needs so that we can continue to deliver services that help them be successful. We also plan to launch a new brand, including a company name. It’s an exciting time for both myself and for our employees, who will now have a greater ability to impact the future of this organization.”

Added Gillis Cashman, managing partner at M/C Partners:

“West Monroe Managed Services represents an exceptional technology services platform. As a standalone, well-capitalized company with a highly experienced leadership team and passionate, talented employees, we feel the business will be in a stronger position to address the existing and future needs of its customers.”

Concluded Abhishek Rampuria, VP at M/C Partners:

“West Monroe Managed Services has built a differentiated application management expertise that is highly valued by its customers. We are excited to begin this partnership and to provide the financial and operational resources to facilitate future growth and continued success.”

Private Equity Firms and MSPs: The Background

Dozens of private equity firms have been acquiring MSPs. The deals often include long-term rollups and geographic expansions to gain scale, recurring revenue and margin expansion.

More M&A deals and private equity investments are a safe bet. Indeed, private equity investors are sitting on a record $1.5 trillion in cash, according to new data from Preqin. Yes, that’s trillion — with a T. That is the highest on record and more than double what it was five years ago, CNBC reports. Amid that reality, private equity firms are scrambling to make investments.

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.

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