Tim Mueller’s Transaction Analysis: New IT M&A Deals Nov. 3

Sirius Acquires Forsythe

Financial Information*

  • Financial Terms Not Disclosed

Transaction Facts

  • Sirius Computer Solutions today announced it has closed its acquisition of $1B solution provider Forsythe Technology. Forsythe will initially operate as a wholly owned subsidiary of Sirius.

Consolidation in the MSP Space

  • Strong Repertoire: The deal marks Sirius’ seventh acquisition since 2014. In August, Sirius acquired business intelligence consulting firm Brightlight Consulting, and in December 2016, acquired solution provider Continuum Worldwide and IBM infrastructure solutions provider thinkASG. 2016 was a busy year for the company — it also purchased digital software solution services assets from Avnet and security-focused solution provider Force 3. Meanwhile, in 2015, Sirius acquired Varrow, and also announced a new partnership structure; private equity firm Kelso & Co. acquired an equity interest in Sirius from Thoma Bravo and Harvey Najim in the third quarter of the year.
  • Big Player: Through strategic operations and smart leadership, Sirius has grown to become one of the most prominent solutions integrators in the U.S.; the company reported its annual gross revenue was at ~$2.2B. The Forsythe deal will boost the combined company to become the 20th largest solution provider in North America, creating a 3,000 employee, $3.26B company.
  • Expansion of Offerings: Sirius’ solutions and services offerings in security, risk management, and data center transformation will expand with the acquisition. In light of increasing demand for security, the move will make bring additional value to the company; the two security practices will account for ~$510M combined.
  • Valuable Asset: Forsythe was founded in 1971 and has remained competitive as a 100 percent employee-owned, private company; the company has been profitable for 46 consecutive years, and sales have hovered around the $1.1B mark for the last four years. The company also has a history of M&A, acquiring 10 companies since 2001. On top of strong revenues, Forsythe launched a multicloud private storage offering and a security incident and event management (SIEM)-as-a-Service offering, adding more high-end value.
  • Active Channel: Amid increasing margin pressure in the enterprise market, the channel has seen more consolidation; among the channel deals completed this year are Insight Enterprise’s $258M acquisition of Datalink (martinwolf advised Insight in the transaction), HTC Global Services’ ~$90.7M auction acquisition of Ciber’s North American and Indian operations, Apollo Global Management’s acquisition of West Corp., and the $2.8B merger of Novitex and SourceHOV.
  • Historical Advantage: Sirius has a long history of working with distinguished companies. Sirius is IBM’s largest value-added reseller in the U.S. that serves medium to large enterprises, with more than 52% of Sirius’s revenue coming from IBM’s products and services. In addition, Sirius has several key partnerships; it is a Premier VMware Partner, a Platinum Partner with HPE and Intel, a Gold Partner with Cisco, Microsoft, and Trend Micro, and an AWS partner. The addition of Forsythe, a formidable Oracle partner, will help strengthen its brand even more; Forsythe holds key partnerships with Dell, IBM, VMware, HPE, Symantic, Cisco, Citrix, and NetApp as well. Furthermore, the company has over 40 Partner of the Year awards.

For more information about this transaction, click here to read the press release.

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