November 12, 2013 (Atlanta, GA): Cogent Growth Partners, LLC (Cogent), the buy-side M&A advisory firm specialized in information technology (IT) services industry mergers and acquisitions, announced today that over the last four quarters ending September 30, 2013 the company has completed 12 transactions for its clients, and they expect the fourth quarter to be “busy as normal,” leading into what already appears to be a very active first few quarters of 2014 and beyond.
“As we have been maturing as a company, our relationships with our clientele and the candidate companies we meet have broadened our visibility into the market and the time horizon for potential transactions,” said Rick Murphy, CEO and Managing Partner at Cogent, “there continues to be strong pent up desire to grow and diversify amongst our clients, and we are speaking with more new prospective clients than ever before, so we are confident that the buy-side is getting stronger.” Also, Murphy added, “The sell-side candidate companies we meet are just as interested in broadening their own horizons and they quickly understand the right transaction can help them flourish as part of something bigger, or propagate their new endeavors. The vast majority of these candidates are interested in learning more about a potential opportunity, and this trend should continue well into the future.”
“The IT services industry has been a hotbed for M&A activity going on several years now,” stated George Sierchio, Vice President and Senior Partner at Cogent, “but it’s also interesting to see more of our clients looking to use an acquisition strategy to catapult them into new geographies or broaden service offerings to their client base, versus the more traditional consolidation track.” Additionally, Sierchio said, “This shift in vision has us handling a continued increase of buy-side transactions for medium to enterprise-sized clients in the US as well as international markets. We are also seeing a noteworthy upward trend of private equity firms and fund-backed individuals seeking our services, to enter the space for investment purposes, or outright acquisition, of well-established recurring revenue based IT services firms.”
According to Bruce Teichman, Vice President and Partner at Cogent, “Over the course of 2013 the IT industry has continued to see rapid adoption of managed and cloud services. For those firms now transitioning or further transforming to this model, significant investment remains for changes to talent, tools and technologies. End-user clients are also much more cloud savvy today, and before handing over their systems and data, they are requiring their IT provider to have a higher level of scale, deeper capabilities and greater longevity. Couple this with the still extremely fragmented IT services market, and the value of merging these businesses to form larger, more mature organizations makes perfect sense and supports the increases in activity we’ve been seeing and are expecting for 2014.”
Additionally, Murphy said, “The Industry Retail Group transaction we accomplished this summer for our client Vector Security, underscores the fact that companies not commonly thought of as an MSP or an IT Services company are very much aware of the importance of the IT space generally and betting on its longevity. Consolidation is not only going to happen from within the industry at a rapid pace, but also as a result of companies who see IT services as multi-faceted addition to their current growth curve and the potential to further leverage their existing client base. We think the IT services space is evergreen for well-run companies.”
About Cogent: Cogent Growth Partners is a buy-side merger & acquisition advisory firm specialized in the information technology (IT) managed service provider and cloud services industries. We combine focused merger & acquisition know-how with deep IT Services operational expertise to help MSP’s grow via the planning and execution of customized acquisition strategies. For more information visit http://www.cogentgrowthpartners.com
Posted on Nov 12, 2013