New York-based Network Solutions & Technology this week said it has acquired Certus Technologies in a move the company said will give it a presence in the New Jersey area.
The acquisition of Certus marks the seventh acquisition for Network Solutions & Technology, or NST, and is a way to better serve its clients in the New Jersey area, said Matt Brown, vice president of the East Northport, N.Y.-based solution provider.
The acquisition is an expansion play for NST, which in the 20 years since it was founded has grown from a space in a basement to now having 75 employees across eight states serving clients in 30 states with cloud aggregation and cloud services capabilities, Brown told CRN.
“It’s part of our growth strategy, which includes both organic and acquisitions,” Brown said. “Our goal is to do one acquisition a year, with a stretch goal of two a year.”
Brown and the owners of Eatontown, N.J.-based Certus met at ConnectWise’s IT Nation 2019 conference during an M&A session featuring a “speed dating” program for solution providers looking at potentially buying and selling their businesses, Brown said.
“There were four buyers to every seller there,” he said. “There were 20 to 30 companies looking to sell moving from table to table, with each table having four potential buyers.”
The two companies found their technical capabilities and their cultures similar, and by March of 2020 had signed their first letter of interest, Brown said. That, he said, was just before the COVID-19 pandemic hit. They slowed down discussions after that, restarted in the summer, and closed the deal early this month, he said.
NST, in its prior six deals worked directly with the companies it acquired as they were smaller companies with five to eight employees each, Brown said. However, for the Certus acquisition, he said NST worked with Jeff Boate, managing partner at Share.Profit.Grow, a consultant and peer group focused on channel M&A.
“Certus was our biggest acquisition yet, with 12 people,” he said. “And it was definitely a more mature company than the others. So we had to structure the deal differently, do due diligence, and review all the contracts and terms.”
NST is currently in talks with at least two, and possibly three, other solution providers about acquiring them, Brown said. The company is also busy fending off interest from other companies asking about acquiring it, he said.
“We get inquiries on a daily basis,” he said. “There’s a lot of M&A going on in the market. We just haven’t decided to jump into that game yet.”
While Brown declined to discuss the cost of the acquisition, he did say Certus was a profitable company whose owners felt a sale now was the best way to grow.
“As you grow in this industry, you hit certain ceilings,” he said. “You have to bounce off those ceilings, and then break through. Certus bounced, and then found it needed help to breakthrough. We were there to help them get over the hump.”
NST is a private company, and has grown over the years with no private equity investment, Brown said.
Source – CRN