Sparxent Start-up Begins Managed Service Provider and VAR Acquisitions August 2008

War Chest: During its initial round of acquisitions, Sparxent plans to acquire companies with combined revenues of about $100 million to $120 million.

Experience: Taylor is a former general and channel executive at LANDesk. Co-founder Steve DeWindt is the former director of worldwide reseller sales at Intel.

Strategy: Sparxent wants to acquire multiple MSPs and VARs, and become an IBM Global Services or EDS of sorts for the midmarket.

Learning From History: The VAR Guy openly wondered if Sparxent’s strategy was similar to the old USWeb, which acquired a bunch of Web design and integrator shops but collapsed during the dot-com implosion. Taylor recalls the lesson of USWeb, and says the Sparxent acquisitions will have minimal overlap in terms of technology focus, business focus and geography.

Don’t Expect to Cash Out: VARs and MSPs looking to make a fast buck aren’t of much interest to Sparxent. Instead, Sparxent is seeking to acquire companies whose management teams want to remain on-board in executive positions. Also, the acquisitions involve some cash but also heavy equity incentives tied to Sparxent’s performance.

Back-end Systems: Sparxent won’t be a pure integrator. Rather, acquired companies will plug into some sort of back-end Sparxent system — perhaps a managed services or SaaS system. Details sound like they’re still pending.

Next moves: More acquisitions coming. Stay tuned.