martin wolf Transaction Analysis

• Enterprise Value: N/A
• Expected Revenue: $1.3 billion

• IT Solutions Providers AHEAD, Data Blue and Sovereign Systems announced today that the three companies are merging.
• Court Square Capital Partner has owned AHEAD since 2015 and Data Blue since April 2019.
•  According to the press release, the merger will form a $1.3 billion gross revenue company with over 600 employees.
• It will allow the solution providers to expand geographically with locations in Chicago, Atlanta, Nashville and other offices throughout the Midwest and East Coast.
• CEO of AHEAD, Daniel Adamany, will lead the combined company with Stephen Ayoub, founder and CEO of Data Blue taking the reigns as president and chief revenue officer.
• The transaction is expected to close within 60-days pending regulatory approvals.

• Technical Giant:  AHEAD, Data Blue and Sovereign Systems merger will enable all the firms to gain new competencies in the differing regions they serve. The companies can now adopt service offerings across vertical focuses in enterprise service management, security, analytics, managed services and networking, and cloud services.The companies will also have a handful of strong partners, including Cisco Systems, Dell Technologies, VMWare, ServiceNow, Amazon Web Services and Microsoft Azure.
• Court Square’s Hesitance : One factor that makes this deal interesting is the waiting period that Court Square took before merging AHEAD and Data Blue. It has owned AHEAD since 2015 and funded one acquisition for the company this year, a month after it had already acquired Data Blue.
• History of Value Creation in IT: Not to mention, the chief architect for Court Square is Jeff Vogel whose had experience creating impressive value for IT solution providers. He led the acquisition of CompuCom for $628 million in 2007 and sold the company for $1.1 billion in 2013, close to doubling the initial investment. By the time Court Square exited the investment, CompuCom had $2.3 billion of gross revenue and more than 11,500 employees.

• Combination of  M&A: The three companies have been consistently active in acquisitions. Data Blue acquired LPS Integration in January 2017, and Williams & Garcia in April 2017, and then were acquired by Court Square in April of this year. AHEAD was acquired by Court Square in November 2015 for $215 million and acquired Link Solutions Holding in May 2019. Sovereign Systems has been previously acquired once before by LogicsOne in January of 2011.

  For more information about this transaction, click here to read the press release.

  *Financial information from the press release 

   

  *Acquisition history source: Factset 

  martin wolf  was not the advisor in this transaction.

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