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IT services M&A, colocation deals continue to flourish

The latest round of IT services transactions feature KSM Consulting, Atos and Cyxtera. The activity underscores the continual demand for cloud services and digital infrastructure.

John Moore
By
Published: 22 Feb 2021

The energetic pace of IT services M&A shows no sign of slowing down, as a range of buyers, from growing consultancies to global systems integrators, snap up specialized cloud skills.

In the U.S. market, KSM Consulting purchased Tempus Nova, a Google Cloud consulting firm. KSM Consulting's third purchase in 18 months, the transaction expands the company's national footprint to Denver. KSM Consulting's reach also includes Columbus, Ohio; Lansing, Mich.; and its Indianapolis headquarters. The company, which grew from 25 to about 130 employees between 2014 and 2019, now employs more than 300 people following the Tempus Nova acquisition.

Tempus Nova also lets KSM Consulting offer multi-cloud services that span AWS, Microsoft Azure and Google Cloud, noted KSM Consulting CEO Mark Caswell. He said the multi-cloud strategy intersects with the company's focus on data analytics, technology consulting and managed services, and digital transformation.

In addition to its Tempus Nova acquisition, KSM Consulting revealed a new investment partner, Investcorp, which has acquired a majority stake in the company. In a video statement, Steve Miller, head of knowledge and professional services private equity for North America at Investcorp, said KSM Consulting combines two of his company's core focus areas: professional services and tech-enabled services.

Renovus Capital Partners, which acquired a majority stake in KSM Consulting in 2019, will have minority ownership in the company.

Investcorp, meanwhile, puts KSM Consulting in a position to continue its growth through IT services M&A. "That strategy will absolutely continue," Caswell said, noting that the company had been doing about one deal every six months under the majority ownership of Renovus.

Caswell said KSM Consulting could purchase additional companies to expand to other U.S. cities or deepen its technical skills.

Investcorp's backing has helped build Calligo, an MSP based in Jersey, a British crown dependency in the Channel Islands. Calligo last week acquired its tenth company, Decisive Data, a business analytics consultancy based in Redmond, Wash.

Atos buys Salesforce consultant

On the global stage, Atos, a Paris-based integrator with €11.58 billion in revenue (about $14 billion), has acquired Profit4SF, a technology and management consultancy that focuses on Salesforce enterprise implementations in the Netherlands.

Atos noted the deal tracks with its Salesforce growth plans and follows its purchases of Eagle Creek and Edifixio in 2020.

The French company, however, has decided not to pursue an acquisition of DXC Technologies. Atos proposed a deal in January 2021, but in February said its board "unanimously determined not to pursue a potential transaction." The deal would have bolstered Atos' North American presence, creating a combined company with revenue of about $34 billion.

Cyxtera to merge with SPAC

Cyxtera Technology Inc., a Miami-based colocation company, has merged with Starboard Value Acquisition Corp., a publicly traded special-purpose acquisition company.

The combined company would become the third-largest publicly held provider of retail colocation and interconnection services, according to a joint statement from the companies. The transaction is expected to close by mid-2021.

In a teleconference, Cyxtera CEO Nelson Fonseca said his company aims to work with MSPs. He said Cyxtera provides the digital infrastructure that MSPs need to deliver customer offerings. "We do not provide managed services to our customers," Fonseca said. "We see managed services providers as our partners."

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