Mergers and Acquisitions, Content

PE Firm Riverside Partners Backs Merger of Convergence Networks and Grade A

Two managed IT services companies, Convergence Networks and Grade A, are merging. The announcement was made by private equity firm Riverside Partners, who oversaw the deal and will back the newly combined company. Terms of the deal were not disclosed.

This is M&A deal 496 that ChannelE2E has covered so far in 2020. See the full M&A deal list here.

The combination of the companies creates a new leading provider of managed IT and cybersecurity services for clients across a variety of industries, according to Riverside. To execute the transaction, Riverside is investing money to accelerate the new company’s growth through organic means and through strategic add-on acquisitions, the private equity firm said.

Management from both Convergence and Grade A will continue to lead the company and be significant shareholders in the new entity, according to the companies. The plan is also for all employees to stay on board, with approximately 130 workers spread between the United States and Canada, a spokesperson told ChannelE2E.

So far, the new company has not been given a name. During the integration period, both companies will continue operating under their existing brands in the market, the spokesperson explained

Convergence and Grade A Merger: Complementary Companies

David Del Papa
David Del Papa

David Del Papa, a general partner at Riverside Partners, commented on the deal:

“We are excited to invest in these two complementary companies that provide best-in-class IT and cybersecurity services to SMB clients. The merged company’s clients can continue to rely upon the same personalized local service they have become accustomed to receiving. At the same time, the newly combined company will offer additional services, greater time-zone coverage, and a deeper bench of technical engineers available to address and defend the expanding and everchanging nature of technology.”

David Belluck, a general partner at Riverside Partners, said:

“The management teams of both Convergence Networks and Grade A have created leaders in their respective geographic markets. Among the many investments we have looked at in IT managed services, these firms stand out for common commitment to customer service and dedicated group of talented employees. We look forward to applying our capital and strategic and operational resources to support the combined company’s continued growth.”

Mat LaFrance, CEO of Grade A

Mat LaFrance, CEO of Grade A, added:

“We have known Eric and the rest of the Convergence team for over ten years, and combining is a natural extension of the informal collaboration we have enjoyed together over the years. From the beginning, Grade A was founded on a passion for working with exceptionally talented people who enjoy being able to solve technical challenges for our clients to help move their businesses forward. It has always been important to us that any path forward meant aligning with companies who shared similar values and we are thrilled to be able to find like-minded organizations in Convergence Networks and Riverside Partners. With this new partnership, we can continue to scale and expand our services for our clients, and provide new development and growth opportunities for our teams.”

Eric Gray, CEO of Convergence Networks, said:

“If you had told me going into a COVID lockdown in March of this year would have resulted in a merger and an investment partner before year-end, I would have said you were crazy. Funny how things like this happen at the most unexpected times. This decision by our management team wasn’t taken lightly. Our team is thrilled to combine with Grade A and bring on a new financial partner in Riverside Partners. Both organizations share similar values and goals with us. They believe in a people-first culture providing an exceptional customer service experience with a security-first mindset to help our clients achieve their business goals and our team members to advance in their careers.”

Martinwolf’s LMM Group, which operates as an M&A advisory firm serving the middle-market IT industry, served as financial advisor to Convergence Networks and Grade A.

Convergence and Grade A Merger: Company Background

Headquartered in Portland, Oregon, Convergence Networks has operated for approximately 20 years. The company works with SMB clients, offering a range of solutions including cybersecurity, strategic planning, end-user support, cloud, and hardware.

Grade A is based in Ottawa, Ontario, Canada, and has 18 years of experience specializing in IT support for SMBs in various industries. Grade A offers IT solutions that include strategic IT planning and consulting, end-user support, cloud solutions, managed hardware and professionally managed project-based services.

Riverside Partners was founded in 1989. The firm’s total capital commitments amount to $1.6 billion raised since its founding. Riverside looks for growth-oriented companies in the technology and healthcare industries, according to its website.