Portfolio and investment managers from two private equity (PE) firms and an angel investor group will quietly navigate the halls of ConnectWise IT Nation 2016 this week in Orlando, Fla. Although you won't necessarily see their names on the registration list, they'll be scouting the conference halls, bars and back rooms for potential acquisition targets and market trends.
Among the potential suitors:
- A PE firm that already owns a midmarket MSP. The organization is seeking to potentially acquire additional MSPs that specialize in Oracle, SAP and SQL Server data management.
- A PE firm that works within the telco market. The company's investment portfolio already includes network-centric services that provide secure connections to Amazon Web Services (AWS) and Microsoft Azure.
- An angel investor organization that's seeking to understand how MSPs currently consume and sell BDR (backup and disaster recovery) services. The angel group is gathering the information for a stealth storage startup that may emerge with its first products in Q2 2017.
IT Nation, hosted by ConnectWise, is an annual conference that attracts a few thousand MSPs, VARs and IT services providers. ConnectWise increasingly brands the community as a gathering place for IT entrepreneurs and technology solutions providers (TSPs).
Multiple MSPs have negotiated M&A buyouts at the conference over the years. Among the recent deals: Internet & Telephone's acquisition of Jenaly Technology Group. Also, M&A veterans like Aldridge and Arterian typically attend the conference.
M&A activity among MSPs continues to accelerate, with multiple deals typically emerging each week in 2016. Much of the dealmaking involves pure demographics. Indeed, many business owners are seeking exit strategies as they near retirement age. Those demographics, however, may ultimately drive down valuations since there are more sellers than buyers in the market.
For more information:
- IT Nation News: Track all ConnectWise IT Nation 2016 news here.
- Merger and Acquisition Activity: Track all M&A deals involving VARs, MSPs and CSPs in the ChannelE2E Milestones section.
- Funding and Financing Database: Trying to find financial pipelines and/or investors for your business, check out the ChannelE2E Funding Database.
ChannelE2E will update this blog entry if/when any M&A deals are hatched at the conference.