Two VAR500 Companies Merge; Form Managed Services Giant

Just when I was set to unplug for the night, I noticed another managed services industry merger -- the second of the day. This one involves Presidio Inc. and Coleman Technologies Inc. -- two VAR500 companies. The duo will combine to create a $1.1 billion Cisco-centric managed service provider that also has VMware, HP and Microsoft expertise.

Joe Panettieri, Former Editorial Director

January 7, 2010

2 Min Read
Two VAR500 Companies Merge; Form Managed Services Giant

managed_services_merger

managed_services_merger

Just when I was set to unplug for the night, I noticed another managed services industry merger — the second of the day. This one involves Presidio Inc. and Coleman Technologies Inc. — two VAR500 companies. The duo will combine to create a $1.1 billion Cisco-centric managed service provider that also has VMware, HP and Microsoft expertise. Here are the preliminary details plus some analysis.

According to a joint press release: Presidio (a diversified professional and managed services firm) has acquired Coleman (an IT and systems engineering services firm).

Coleman will complement Presidio’s existing business lines, including:

  • Presidio Networked Solutions, a professional services and advanced IT infrastructure solutions provider;

  • Presidio Managed Networks, a Managed Services and Telecom Consulting firm;

  • Atlantix Global, a provider of remarketed technology solutions; and

  • Presidio Technology Capital, a captive leasing operation.

Now some fast stats from the release. The combined companies…

  • will have revenues of more than (U.S.)$1.1 billion

  • features 70 Cisco CCIEs and 1,200 employees

  • will rank as one of Cisco’s top five North American channel partners, with additional partners including VMware and Microsoft

  • ranks among Cisco’s first VBlock 2 partners

Alas, I didn’t spot any M&A multiples or selling price — so it’s difficult (impossible?) to say if Presidio paid a premium for Coleman. And I must concede: I’m not familiar with either company’s profitability metrics.

Revenues Down A Bit?

At $1.1 billion in combined revenue this is a big deal — though revenues from one or both companies apparently declined in 2009. How do I know? Here’s the quick math:

  • Presidio was ranked No. 91 in the 2009 VAR500, generating $947.7 million in annual revenue for 2008.

  • Coleman Technologies was ranked No. 171 in the 2009 VAR500, generating $276.7 million in annual revenue for 2008.

  • Quick math from the 2008 revenue figures ($947 million + $276 million = $1.223 billion) suggests one or both companies saw their revenue shrink in 2009 (since Presidio and Coleman say they have a combined $1.1 billion in revenues).

Daily Double

This is the second MSP-oriented merger/acquisition of the day. The other deal involved FusionStorm, an MSPmentor 100 company, swallowing CentriServ, a consulting company that specializes in client-side virtualization. It was FusionStorm’s second acquisition in recent months.

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About the Author

Joe Panettieri

Joe Panettieri

Former Editorial Director, Nine Lives Media, a division of Penton Media

See more from Joe Panettieri
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