Ntiva, backed by PSP Partners acquired The Purple Guys from Kian Capital and ParkSouth Ventures, forming a goliath in the IT managed service provider market. The goal from Ntiva was to create “one of the largest, pure-play MSPs,”1 and this acquisition has pushed towards this goal by not only expanding Ntiva’s already nationwide reach and balloons their client base to over 2,000 customers, but also pushes revenue above $170 million.1 The groundbreaking acquisition was announced on April 29th, 2024. We believe that this may be a bellwether for a trend we expect to see much more of in the coming years: consolidation at the top of the market as large private equity-backed MSPs buy other large private equity-backed MSPs. The M&A market among IT managed service providers has heated up following a down year in 2023, and this most recent deal from Ntiva has certainly seemed to make significant headlines.
(1) Holly Dowden – Ntiva Announces the Acquisition of The Purple Guys, Forming a Top MSP Powerhouse
The Inside Scoop
Recently, RKCA caught up with Christopher Vollmond-Carstens (CVC), the Chief M&A Officer at Ntiva, to discuss the acquisition and how the deal came together. He reiterated his excitement around the deal, specifically pointing to the cultural alignment between the two firms as the largest reason. CVC cited the strong relationship between Ntiva CEO Steven Friedkin and The Purple Guys CEO Kevin Cook which has spanned the past several years as being one of the primary catalysts. Reiterating this point, he went on to say “both companies make a difference in the communities where they operate and strive to provide a strong, valuable service to their customers. It was a natural fit.”
Another significant factor behind the landmark deal was the respective geographies of each firm. Ntiva had existing operations in particular cities and markets across the US, focusing on the East Coast, Chicago, and Colorado. To contrast this, The Purple Guys’ heavy presence across middle America allows for immediate expansion without potential customer cannibalization or geographic overlap.
One key component to getting the deal done was each team being able to escape the traditional mindset on a transaction at this scale. “Typically you see businesses of this size move from one sponsor to another,” CVC remarked, “and to get this deal done it was important that both sides were willing to think differently about the transition.”
Like any M&A transaction, there were hurdles to overcome. The strong rapport between the executive teams gave both sides the opportunity to manage through the challenges that arose, and come to a satisfactory close.
When asked if the deal would put a halt to Ntiva’s acquisitive appetite in the short-term, CVC assured us this would not be the case. “Absolutely not. We’re always looking to acquire great organizations who are excited to partner with Ntiva. The only real change is our criteria for ‘in market’ and ‘out of market’ deals now that we have doubled our markets.” When asked about the difference in criteria, CVC informed us that Ntiva will continue to look at most majority recurring revenue MSP deals that fit their acquisition criteria east of the Rockies, but those MSPs in markets with established operations will start to be considered, preferably, at $1 million of EBITDA, whereas beachheads in new geographies will need to be larger, around $2-3 million of EBITDA. But, as he stated, these size considerations are directional and Ntiva has made exceptions for strategic or other reasons.
Company Timelines and Select Transactions
About Ntiva
Founded in 2004 by Steven Freidkin, Ntiva has grown to be one of the most recognized names in the IT MSP industry. Ntiva reached $18 million in revenue by 2015, and has since grown to over $100 million in revenue prior to The Purple Guys acquisition,1 as well as partnering with two different institutional capital providers. Ntiva has an acquisitive history, beginning shortly after partnering with Southfield Capital. With Southfield’s backing, Ntiva completed 12 acquisitions. This drive for inorganic growth is continuing under PSP Partners, completing two acquisitions prior to The Purple Guys.
(1) MSP Success – How Steven Freidkin Grew Ntiva To $18M Organically Then Turbocharged It To Over $100M With PE Partners
About The Purple Guys
Enterprise Computing Services was founded in 1994, merging with My IT in 2020 following investment from Kian Capital and ParkSouth Ventures. The Purple Guys was acquired in 2021 and the existing company was rebranded to The Purple Guys across all locations. After the rebrand, The Purple Guys continued their acquisitive streak, bringing seven companies under their umbrella before joining the Ntiva team. Today The Purple Guys serves a national customer base and the team has grown to over 280 members prior to the acquisition by Ntiva.
