Trace3: Acquisitions, Private Equity Fuel MSP’s Growth
The company is backed by H.I.G. Capital, a very active MSP- and IT services investor. Trace3 reported $1.2 billion in revenue for 2018. It also credits organic account expansion for its sixth straight year of growth exceeding 20 percent. Income figures were not disclosed.
Growth is expected to continue through 2019, spurred by the cross-selling of consulting services, managed IT solutions, and core data center technologies within the consolidated customer base, the company said.
Trace3: Expanded IT Services Footprint
Trace3’s Data Strategy and Optio Data acquisitions included nine offices in Michigan, Ohio, Indiana, Kentucky, and Georgia. The addition of these offices along with redundant, 24×7 Network Operations Centers, and a national sales team helped Trace3 expand its geographic footprint, the company asserted.
Tyler Beecher, CEO of Trace3, described this strategy:
“Our integration strategy involves measured growth of the IT consulting, managed services, and fulfillment expertise that made each company strong in their respective regions. We are on a path to deliver the best of all three companies across the United States.”
Trace3’s organic growth was achieved by broadening the reach of its innovation and research platform, according to the company. That included consulting services for cloud computing, security, artificial intelligence, and machine learning. Still, the company did not disclose organic vs. M&A growth rates.
The company also created a new venture capital-briefing program with the goal of helping CIO’s accelerate their digital business transformations. Customized research about emerging technology has become something that sets his company apart, according to Beecher.
H.I.G. Capital: Private Equity for IT Services
Trace3 is backed by H.I.G. Capital, which has been very active across the MSP, CSP and IT services markets. The company has more than $25 billion of equity capital under management. The family of funds includes private equity, growth equity, real estate, debt/credit, lending and biohealth.
The PE firm’s key MSP- and IT services investments have included:
- June 2018: H.I.G. invested in Eze Castle Integration (ECI), the well-known managed service provider (MSP) for financial services customers.
- October 2017: H.I.G.-backed AVI-SPL, an audio visual specialist, acquired Sharp’s Audio Visual — a Canadian integrator.
- September 2016: H.I.G. acquired CXtec (aka CABLExpress Corp.) and TERACAI Corp. — which I believe are two sister businesses based in Syracuse, New York.