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Managing mergers & acquisitions

Acquiring or merging two—or more—MSPs is a big project. You will need a good plan.


Managing mergers & acquisitions

This year continues to be another big year for mergers, acquisitions, and multiple MSPs rolling up into a single company.


In the month of July alone, Alfar Capital and Walter Capital partners bought Canadian MSP Corp with the intention of merging it with Groupe Access. Thrive, continuing a seven-year MSP shopping excursion, extended its presence into Texas by acquiring IT Freedom. And Fulcrum IT bought Canadian Stoneworks Technologies.


This tech shopping spree from private equity firms is not new. They have been so eager, in the past couple of years, to buy MSPs that they have become a dominant force in the consolidation of the industry. And they aren’t done yet.


PE firms are MSP shopping


Abraham Garver is MSP team leader and managing director of Focus Investment Banking. In this role, he has advised many MSPs leaders on managing these complicated mergers. He told ChannelE2E that buyers outnumber sellers in the MSP marketplace, at the moment. “There are larger and larger funds wanting to make larger and larger platform investments,” he said. “And they are frustrated. There’s a lack of assets, especially in the platform size they want.”


While it can be challenging to ensure PE is the right fit for your MSP and that the PE fits the culture you have built, this is a great place to be for MSPs. It also means, if you are the leadership at one, you are facing – or will be soon – the formidable task of merging the customers, staff, processes, and technologies of two or more companies.


This is a complicated task. Most mergers do not go well. You will need a plan.


A good plan is key


Mike Fowler, CEO of Dallas-based Iconic IT, has been through a few of these mergers. He knows that your plan can make the difference between a disaster and a smooth outcome. He told ChannelPro Network that even the straightforward parts of a merger are complicated. “There are hundreds and hundreds of things to do to integrate someone into ConnectWise. If your plan says, ‘integrate into ConnectWise,’ you have essentially failed to plan, and it won't work.”



“If your plan says, ‘integrate into ConnectWise,’ you have essentially failed to plan, and it won't work.”



There are a lot of people involved in a merger, as well technologies, compliance issues, legal necessities, customer expectations, and much more. And to make the task even more challenging, much of the merger needs to happen over a tight timeline. This is such a complex endeavor that large MSPs with a lot of M&A activity have felt the need to build internal teams solely focused on M&A implementation. Meanwhile customers need services, employees need to get paid, and everyone has to be told what’s happening (at the right time and right way). Oh, and it’s a good idea to handle everyone carefully so you don’t hemorrhage the staff and customers. Because people don’t like change.


A good plan, for something this complex, is several different plans.


You need a high-level plan that takes on big-picture problems like what the new company will look like and how to merge the strengths of both organizations.


But you can’t stop there. You will also need granular plans to govern everything from integrating new technologies to updating customers to onboarding personnel and informing everyone from employees to customers to vendors of the change.


This nuts-and-bolts part, if you are in leadership, may feel like something you can hand off. But this “plumbing and wiring” part of a merger is often where things go wrong.


Fowler’s own project plan template has 3,000 steps. You, too, will need a plan of that magnitude.

The right tool for the job


If you attempt to manage an implementation plan that complex with spreadsheets, email, and simple work-tracking systems, you’ll be quickly overwhelmed. Every team will spend too much time tracking minutia. And you will never get the big picture view you need.



Before you build a template with thousands of steps, choose a software tool capable enough to manage this level of complexity.



Before you build a template with thousands of steps, choose a software tool capable enough to manage this level of complexity.


If you choose a system robust enough to bring all stakeholders into the process, track task completion, and show the progress against the timeline to all stakeholders, you will give your merger a better chance of going smoothly and on time. The faster you can get to a successful implementation, the faster you can recognize the value of a merger or acquisition.


An intelligent project management tool designed for this level of complexity, such as Moovila’s Perfect Project and Activate, will tap the power of computer intelligence to track tasks, monitor the schedule, and flag problems – much the way the RMM tools you use as an MSP automate network monitoring. This frees your teams to focus on getting the work done and gives the leadership a clear view of how it’s all going.


Instead of asking a human to track the merger process and integrating teams into technologies, the AI can do that across all the projects in the M&A portfolio. If incomplete tasks threaten to affect the timeline, the AI will fly a red flag that’s hard to miss.


A plan with thousands of steps


Once you have committed to a work management tool, the next step is to create a template that captures every task you need to accomplish for each segment – employees, customers, technologies, etc. – of the merger.

  • What decisions need to be made?

  • What technologies are you using going forward?

  • Who needs to be onboarded to your tech tools?

  • What needs to happen to move team members to the insurance, payroll, and retirement plans you will use going forward?

  • Do agreements need to be revisited?

  • Do customer payments systems or points of contact need to change?

  • Are there security and compliance issues?

  • Who is handling what?

Your templates will be unique to your company. But whether you build your plan from the ground up or modify an existing template, it should be one you can repeat and that will improve as you learn.


When you are moving customers of the acquisition into your preferred system, for example, you might start with a single customer. Create a template for each step, execute it once and modify the template as you discover steps you missed or better ways to do things.


That way your template learns as you do, and you won’t repeat mistakes as you transition clients. The same is true with onboarding acquisition employees. Only after you have developed templates that work well in your beta tests, execute them on more customers or employees.


From merger planning to culture building


With the right tool, your merger plan can also be the first step toward the bigger challenges of a merger: integrating a group of strangers into a thriving and productive culture.


A single invitation to the different merger project plans brings every person – employee or customer – into your new company. Once there, they can see the names, faces, and roles of other team members, ask questions, and chat with people who are adjacent to the tasks they are working on.


Team leaders can also assign tasks not related to the merger and organize the work and projects of the new merged company here. If onboarding employees included collecting skill sets and work experience, this work management system will also make it easy for leaders to know who – in the new company – to assign work to. Or if, say, the CTO wants to welcome the new team members, he can do that with a public note or in a chat that the entire team within that specific M&A project can see.


For this to work, though, it’s essential that the software understands each person’s role and the information they can access. If that same CTO, for example, wants to discuss a specific task with the C-Suite – via the note and chat tools – he should be able to do that by choosing the right permission level for his conversation.


When all of that is in place, the software you used to manage the merger can become a way forward for your new enterprise, helping you build a strong culture, while creating a clear work management system capable of managing complex projects and keeping your now larger workforce productive and connected to your enterprise.

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