Martin Wolf Analysis
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Presidio, Inc. acquires INX, Inc. (NasdaqGM: INXI) LINE HERE
- Until this announcement, Presidio had been an authorized Avaya partner on a small scale. This transaction provides them Avaya platinum status and enables Presidio to scale as an Avaya partner and expand corresponding revenue.
- Previous transactions that have led to companies selling both the Avaya and Cisco UC platform have been unsuccessful. Presidio, however, has over the last seven years brought together regional leaders such as Ficomp, Networked Information Systems, Solarcom and Coleman Technologies displaying their ability to integrate companies successfully.
- Compared to transactions such as Windstream Corporation's purchase of Paetec Holding Corp. for 1.2x revenue, this is a smart acquisition for Presidio providing low cost of entry at 0.4x revenue. The reason for a lower valuation was a lack of overall profitability, reporting issues resulting in being delisted, which distracted senior management, as well as lack of scale.
- The new Presidio will aim to be a stronger player for Data Center/Cloud, Collaboration, Security and Network Infrastructure Architecture practices, and strengthen relationships with Cisco, EMC, VMWare, NetApp and VCE type vendors.
- INX's limited financial ability could not compete and grow through acquisition and really needed to team up with a larger national player. We expect more transactions to follow in the Avaya Nortel space. Over the past few years we've seen Arrow acquire two Avaya partners (Shared Technologies and Cross Telecom) and national Private Equity firm Court Square make an investment in SPS, a leading Avaya Unified Communications Partner.
- The transaction was clearly backed by American Securities, who acquired Presidio in March 2011 when Presidio was facing a financial crunch.
- The VAR market continues to consolidate as companies seek scale and size. VARs face a tremendous shift as the product resale model will not survive. We see the need for further consolidation, more system integration revenue, and VARs to embrace managed services and the cloud model.
- Presidio was #23 on the 2011 VAR500 list and INX came in at #167 the year prior. The combined company will keep the Presidio name and include more than 1,800 employees in 45 offices across the United States.
Please click here to read the press release.
Martin Wolf was not the adviser of this transaction. To learn more about this transaction or our firm, contact Stefan Williams at email@example.com or (925) 215-2740.
About Martin Wolf
Based in Silicon Valley, Martin Wolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 100 transactions in six countries. We are a five-year member of the Merrill Lynch PS Referral Network, and were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies. Martin Wolf is member of FINRA and SIPC. For more information, visit www.martinwolf.com.
September 30, 2011
SPS, a leading Unified Communications Provider, announced that Court Square Partners has made an investment in the company. Martin Wolf advised SPS in this transaction. SPS is a premier unified communication services integrator, ranked 131 on the 2011 VAR 500 list with 2010 sales of $143 million. Court Square is a $4B+ New York-based PE Group, with more than 150 lifetime investments.
Please click here to view the announcement.
September 20, 2011
Accel-KKR, a technology-focused private equity investment firm, announced that it had taken a majority stake in Infinisource. Infinisource is a leading benefits administration technology and services company. Martin Wolf advised the seller in this transaction.
Please click here to read more.
March 11, 2011
SS&C Technologies (NASDAQ: SSNC) announced that it had acquired Glastonbury, Connecticut-based BenefitsXML. BenefitsXML is a leading provider of enterprise software and SAAS solutions for employee benefit service providers. Martin Wolf advised the seller in this transaction.
Please click here to read more.