Tower Arch Capital buys smart technical solutions

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The investment completes a recapitalization with the founding management team of ITS.

Private equity firm Tower Arch Capital has acquired MSP Intelligent Technical Solutions (ITS), which provides managed IT, cloud, cybersecurity, VoIP telephony and fiber internet services to SMBs across the United States. United. Tower Arch hasn’t said how much it pays for ITS; however, the investment completes a recapitalization with the founding management team of ITS.

This is the first MSP acquisition for Utah-based Tower Arch, whose portfolio includes everything from industrial to consumer services. The deal won’t be its last foray into the MSP market, the company said.

Aubrey Burnett of Tower Arch Capital

Aubrey Burnett is a partner at Tower Arch.

“We’ve had other types of investments related to IT services, but this is our first purely MSP investment. Our goal would be to expand our footprint in the MSP space through ITS. We want to put more capital work here by putting more money into ITS so they can buy other businesses and grow their service offerings. But, yes, the goal is to expand to other MSPs.

Staff increase

ITS has offices in six US cities and an international workforce that makes up half of its staff. The influx of capital from Tower Arch will allow ITS to increase its workforce.

Tom Andrulis is the CEO of ITS.

Tom Andrulis of ITS

Tom Andrulis of ITS

“Ten years ago we started to expand outside of the United States. We have a much larger pool of talent to draw from. And the other strategy that we’ve been implementing for many, many years is just to train people from within [the company]. It’s much easier to find people with potential who may not have the experience. We can attract people with high potential, then teach them and grow them through the ranks.

A strong workforce wasn’t the only factor ITS brought to the table that Tower Arch found appealing. ITS developed an “acquisition handbook” which identified internal roles in the business after the acquisition. They determined the roles individuals would take on to ensure that everything from customer contact to ticketing systems was successfully integrated.

“Tom has been very careful about building his platform,” Burnett said. “He has all the necessary resources internally to evolve. It was really important for us. We wanted to make sure we basically had a strong backbone to build the rest of the business. A big part of our thesis is to continue this pace of acquisitions to help companies grow.

Transactions on the platform

Abe Garver of Focus Investment Banking

Abe Garver of Focus Investment Banking

Abe Garver is MSP Team Leader and Managing Director at Focus Investment Banking. He introduced Burnett to Andrulis.

“Having been the catalyst for nine MSP ‘platform’ deals for private equity groups, a few things stood out to me about this deal. First and foremost, Tom is an M&A whiz. The number of exceptional MSP targets he was able to uncover during the time we worked together is unlike anything I have ever seen before.

“Tower Arch Capital also stands out to me as an exceptional deal partner for ITS because of their ability to listen carefully to client objectives and then craft a unique partnership proposition,” added Garver. “It not only offered attractive value today, but also an attractive upside opportunity for shareholders and employees as the company continues to grow.”

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