Mergers and Acquisitions, Mergers and Acquisitions

Konica Minolta’s Buyout of IT Weapons

Konica Minolta Business Solutions (Canada) Ltd. -- perhaps better known by its All Covered brand with the MSP and IT services crowd -- acquired IT Weapons Inc. today. It marked the sixth IT services acquisition that Konica and All Covered have announced this year. Here's a look at the deal list.

Konica-IT Weapons: Behind the Deal

All Covered has spent more than a decade acquiring IT service providers across the U.S. When Konica acquired All Covered in early 2011, I openly wondered if Konica would halt All Covered's M&A strategy. They didn't.

Of the M&A deals, Konica's buyout of IT Weapons -- based in Ontario -- is the first outside of the United States. IT Weapons will operate as a subsidiary company under its own name and current management team, though I do wonder if IT Weapons will take on the All Covered brand somewhere down the road. Overall, Konica Minolta's IT services business now has more than 1,000 employees across North America.

> Related: Nearing 50 Acquisitions, All Covered Begins Data Journey

Konica-IT Weapons: IT Services M&A Deal Value?

Konica Minolta and IT Weapons did not disclose financial terms of the deal. But if I had to guess, I suspect Konica paid somewhere around 6 times EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization).

That 6X EBITDA figure is based on IT services M&A metrics tracked by Paul Dippell, CEO of Service Management Inc. Dippell is a former All Covered employee who used to be involved in the company's M&A dealing. I haven't contacted him about the Konica-IT Weapons combination; he mentioned 6X multiple as an industry average during a conference keynote about two weeks ago.

Konica-IT Weapons: More Insights

ChannelE2E will update this article with more insights after we've had a chance to speak with the key players in the deal.

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.