Category Archives for "Managed Services News"

Jun 03

Kyndryl, Cisco Team to Help Enterprises with Digital Transformation

By | Managed Services News

The companies will focus on providing technologies, infrastructure expertise and managed services.

Kyndryl and Cisco are collaborating to help enterprise customers become data-driven businesses a little faster. Cisco solutions and Kyndryl managed services will power the effort, as Kyndryl is the world’s largest IT infrastructure services provider.

Kyndryl and Cisco will team up to help businesses transform their operations by embracing cloud computing services. The companies will also develop new private cloud services, network and edge computing solutions, software defined networking (SDN) solutions and multi-network wide area network (WAN) offerings that they deliver with advanced security capabilities.

Deborah Nevin is vice president of Global Alliances at Kyndryl, which spun off of IBM more than a year ago.

Kyndryl's Deborah Nevin

Kyndryl’s Deborah Nevin

“Companies around the world in all industries are clamoring for solutions and services that can streamline the management and operation of their hybrid cloud and network computing environments,” Nevin said. “We are pleased that our long-standing collaboration with Cisco can provide customers with integrated technologies and services that derive more value from their current IT investments, while embracing the benefits of advanced network and edge computing capabilities.”

Embracing the Entire Cloud Journey

The companies will focus on providing technologies, infrastructure expertise and managed services throughout a customer’s entire cloud journey. They’ll start with strategy and migration, through to running, maintaining and supporting complex IT environments. Cisco and Kyndryl also will work to enable and deliver digital transformation projects for customers around the world. And partners will play a big role in that.

Cisco's Keith Dyer

Cisco’s Keith Dyer

Keith Dyer is vice president within Cisco’s Global Enterprise Sales and Global Partner Organization.

“Kyndryl has a passion for innovation and has demonstrated expertise in delivering IT solutions to thousands of customers globally,” Dyer said. “We’re excited about what Cisco and Kyndryl can accomplish together in building and delivering the next generation of managed services. As customers demand more as-a-service offerings, we will continue to reimagine applications that transform networks and address IT needs to meet this demand.”

Jun 03

Multicloud’s ‘Inevitable Dominion’: Taking Stock of the Big Cloud Trend

By | Managed Services News

As cloud computing advances, multicloud looks like the main winner. We examine what’s going on.

It’s no secret — cloud computing reigns supreme. It’s the technology that gives organizations the power to operate from anywhere. But the type of cloud computing that’s ruling the world is not just one kind. Get ready for multicloud’s inevitable dominion.

Why? Because even though the hyperscalers – Amazon Web Services, Microsoft Azure and Google Cloud Platform – boast huge market share, they cannot claim sovereignty. The private cloud providers – Cisco, Dell, Oracle, HPE and IBM, and even the Big 3 with their respective offerings – serve niche (often large, like Fortune-whatever level) customers with unique demands that hyperscalers cannot touch with their public setups. In addition to public and private clouds, multicloud also includes Kubernetes and the edge. Therefore, with all those capabilities in hand, multicloud, often interchanged with “hybrid cloud,” supports a range of activities and requirements.

Mixing public, private, containerized and edge cloud environments usually leads to the most desirable business outcomes. That’s due to the extra security measures, the customized accesses and permissions, geographic considerations and so on. And that’s why we’re about to get into a slideshow above highlighting multicloud’s inevitable dominion. Because when you know why something is so popular, you can help your customers construct the cloud configurations that best suit their needs.

 

Jun 03

The Future of the IT Channel: 4 Trends for Partners

By | Managed Services News

As hybrid work continues, companies will look to the channel for the best technology and support.

Logitech's Nigel Penny

Nigel Penny

The world of work and education has seen utter transformation over the course of the last two years, and channel partners have had to be swift to respond. Remote working has been the key driver of this, shifting technology requirements for organisations as they’ve had to cater to a workforce both in the office and at home.

With the hybrid model appearing set to continue, organisations will look to the channel for the right technology to support this. In fact, 42% of IT decision-makers think the majority of workplaces will remain hybrid even after the pandemic.

As such, leaders in business and education have had to be more attuned to the technological needs of their staff and students than ever before, ensuring they’re able to be at their most productive regardless of their location. This has seen a shift in investment toward more collaborative and user-centric tools that help to enhance communication, collaboration and well-being – and channel partners have helped get these in place.

4 Trends for Partners

There remains a huge opportunity for the channel to provide technology that ensures everyone from office workers to students can benefit in this new world of work. Here are four trends to help the channel prepare for what this future might look like:

A focus on employee well-being. Working from home has highlighted the shortcomings of office technology, which hasn’t always been designed with the user’s comfort in mind. Employees can’t be expected to be at their most productive when their work setup doesn’t support physical well-being. With almost half of home workers reporting suffering injury whilst working from home due to unsuitable equipment, businesses are looking to invest in tools such as ergonomic mice and keyboards that can keep employees healthy and comfortable, and able to work at their best.

The channel can help. Solutions available include an ergonomic keyboard with a curved, split keyframe which offers better hand-and-wrist posture than a standard keyboard. Input devices such as a mouse can also cause joint and muscle issues, so providing employees with a vertical or trackball mouse can allow them to work comfortably and reduce the risk of conditions such as pronation and carpal tunnel syndrome.

Edtech is on the rise. The use of technology for education has boomed over the course of the pandemic, with schools and continuing and higher education institutions investing in tools to support online learning and minimise disruption.

To make this process as seamless as possible, there’s been an increase in solutions that support students and teachers to deliver lessons, share resources and engage in discussion. There will be more investment in innovative solutions, such as whiteboard cameras that can allow teachers to share content in real time with a clear view of the screen – even when at home.

There has also been a greater focus on peripherals designed to turn devices into effective tools for learning. For example, with the help of a keyboard case, an iPad can be turned into a mini-laptop that allows students to collaborate and learn from anywhere.

In 2022, channel partners will need to focus on their edtech offering and look to provide the education industry with the right tools to help keep students engaged and collaborative, as a hybrid style of learning may continue beyond the pandemic.

A continued demand for video conferencing. Maintaining communication between teams through video has been vital over the last two years. Not only has it ensured that …

Jun 03

‘Dark Clouds on the Horizon’ as European Channel M&A Continues

By | Managed Services News

The channel is consolidating at a fast rate, but the M&A landscape could soon change dramatically.

Economic trends in Europe indicate that private equity firms will likely offer lower multiples to prospective sellers.

So says John Holland, managing director of Corporate Finance Associates. Holland, whose investment banking firm advises midmarket businesses on M&A, said macroeconomic factors are depressing share prices even amongst the hottest technology companies. Thus, companies looking to sell their business shouldn’t be surprised if they receive lower valuations than what their peers reported getting last year.

Holland will participate in a session called “Channel M&A: Everything Today’s Leaders Need to Know,” alongside Total IT Technology Solutions’ Steve Dunmall and August Equity’s Mehul Patel. The session will happen at Channel Partners Europe, 14-15 June, in London.

In this preview, Holland shares insights with Channel Futures about trends impacting consolidation and private equity in Europe.

Channel Futures: How would you summarize the state of channel M&A in Europe? What trends are you seeing among both vendors and partners?

CFA's John Holland

CFA’s John Holland

John Holland: The volume and aggregate value of M&A transactions in Europe in 2021 were extraordinary. According to Pitchbook, the trend continued into [the first quarter of] 2022 with record volume and aggregate value. The robust demand for technology businesses with recurring revenues has elevated valuations to lofty levels as certain sectors have undergone rapid consolidation. However, there are dark clouds on the horizon.

Join 500+ MSPs, resellers and vendors at Channel Partners Europe, 14-15 June, in London. Part of London Tech Week, the event will feature 50+ channel leaders, innovators and experts. We’re expecting 1,500 attendees with whom you can discuss channel best practices and next-gen technology. Register now!

CF: Private equity is one of the most notable forces engaging in channel consolidation right now. What’s one important thing prospective sellers should know about these private equity firms?

JH: Debt is the fuel that propels acquisitions. The low interest rates of the past decade have driven a record volume of mergers and acquisitions. Private equity firms utilize leverage to acquire businesses. Leverage boosts the return on investment in ordinary macroeconomic scenarios. However, as the global economy faces extraordinarily high inflation, interest rates are rising dramatically worldwide, thereby elevating the cost of capital for private equity firms. Meanwhile, the risk of recession seems to be rising as higher fuel costs dampen economic activity. In this macroeconomic environment with higher risk of recession and higher interest rates, private equity firms are likely to adopt financial models with lower valuations. Business owners who are contemplating selling their businesses need to understand that the high multiples on EBITDA (earnings before interest, taxes, depreciation, and amortization) of the past will likely decline.

The public equities market for technology shares might be a harbinger for valuations of privately held technology services firms. Even hot cybersecurity and cloud technology companies like Crowdstrike, Zscaler, and Microsoft have depressed share prices now. In the European IT services area, major players like SoftwareOne, Computacenter and Softcat are way below their 52-week highs.

CF: What’s one key question a prospective seller should ask a prospective buyer, and vice versa?

JH: Sellers of businesses spend an enormous amount of time providing prospective acquirers with financial documents and other confidential details about the sellers’ businesses. Before providing any prospective acquirer with any information, a confidentiality agreement should be executed. Prospective sellers of businesses should ask prospective acquirers to demonstrate the financial capacity necessary for the acquisition. Also, it is important for the seller of a business to understand the goals of the acquirer, the potential synergy with the acquirer, the acquirer’s expectation for the role (if any) of the seller in the acquired business, and the acquirer’s plan (if any) to integrate the seller’s business into a larger entity. Sometimes acquisitions involve the seller rolling over equity into the acquirer’s business. Rolling over equity requires extensive due diligence on the acquirer’s business – just like in any other investment.

CF: Is there anything else you’d like to add?

JH: The best way for a business owner to maximize the value of his/her business on the sale of the business is to have an investment banker orchestrate a confidential auction-like process that pits prospective acquirers against each other. Negotiations between a business owner and a private equity firm are asymmetrical. That’s because private equity firms have teams of legal and financial advisers with years of experience in mergers and acquisitions. Sellers of businesses should level the field by seeking legal and financial guidance from experts.

Jun 03

‘Dark Clouds on the Horizon’ as European Channel M&A Continues

By | Managed Services News

The channel is consolidating at a fast rate, but the M&A landscape could soon change dramatically.

Economic trends in Europe indicate that private equity firms will likely offer lower multiples to prospective sellers.

So says John Holland, managing director of Corporate Finance Associates. Holland, whose investment banking firm advises midmarket businesses on M&A, said macroeconomic factors are depressing share prices even amongst the hottest technology companies. Thus, companies looking to sell their business shouldn’t be surprised if they receive lower valuations than what their peers reported getting last year.

Holland will participate in a session called “Channel M&A: Everything Today’s Leaders Need to Know,” alongside Total IT Technology Solutions’ Steve Dunmall and August Equity’s Mehul Patel. The session will happen at Channel Partners Europe, 14-15 June, in London.

In this preview, Holland shares insights with Channel Futures about trends impacting consolidation and private equity in Europe.

Channel Futures: How would you summarize the state of channel M&A in Europe? What trends are you seeing among both vendors and partners?

CFA's John Holland

CFA’s John Holland

John Holland: The volume and aggregate value of M&A transactions in Europe in 2021 were extraordinary. According to Pitchbook, the trend continued into [the first quarter of] 2022 with record volume and aggregate value. The robust demand for technology businesses with recurring revenues has elevated valuations to lofty levels as certain sectors have undergone rapid consolidation. However, there are dark clouds on the horizon.

Join 500+ MSPs, resellers and vendors at Channel Partners Europe, 14-15 June, in London. Part of London Tech Week, the event will feature 50+ channel leaders, innovators and experts. We’re expecting 1,500 attendees with whom you can discuss channel best practices and next-gen technology. Register now!

CF: Private equity is one of the most notable forces engaging in channel consolidation right now. What’s one important thing prospective sellers should know about these private equity firms?

JH: Debt is the fuel that propels acquisitions. The low interest rates of the past decade have driven a record volume of mergers and acquisitions. Private equity firms utilize leverage to acquire businesses. Leverage boosts the return on investment in ordinary macroeconomic scenarios. However, as the global economy faces extraordinarily high inflation, interest rates are rising dramatically worldwide, thereby elevating the cost of capital for private equity firms. Meanwhile, the risk of recession seems to be rising as higher fuel costs dampen economic activity. In this macroeconomic environment with higher risk of recession and higher interest rates, private equity firms are likely to adopt financial models with lower valuations. Business owners who are contemplating selling their businesses need to understand that the high multiples on EBITDA (earnings before interest, taxes, depreciation, and amortization) of the past will likely decline.

The public equities market for technology shares might be a harbinger for valuations of privately held technology services firms. Even hot cybersecurity and cloud technology companies like Crowdstrike, Zscaler, and Microsoft have depressed share prices now. In the European IT services area, major players like SoftwareOne, Computacenter and Softcat are way below their 52-week highs.

CF: What’s one key question a prospective seller should ask a prospective buyer, and vice versa?

JH: Sellers of businesses spend an enormous amount of time providing prospective acquirers with financial documents and other confidential details about the sellers’ businesses. Before providing any prospective acquirer with any information, a confidentiality agreement should be executed. Prospective sellers of businesses should ask prospective acquirers to demonstrate the financial capacity necessary for the acquisition. Also, it is important for the seller of a business to understand the goals of the acquirer, the potential synergy with the acquirer, the acquirer’s expectation for the role (if any) of the seller in the acquired business, and the acquirer’s plan (if any) to integrate the seller’s business into a larger entity. Sometimes acquisitions involve the seller rolling over equity into the acquirer’s business. Rolling over equity requires extensive due diligence on the acquirer’s business – just like in any other investment.

CF: Is there anything else you’d like to add?

JH: The best way for a business owner to maximize the value of his/her business on the sale of the business is to have an investment banker orchestrate a confidential auction-like process that pits prospective acquirers against each other. Negotiations between a business owner and a private equity firm are asymmetrical. That’s because private equity firms have teams of legal and financial advisers with years of experience in mergers and acquisitions. Sellers of businesses should level the field by seeking legal and financial guidance from experts.

Jun 03

‘Dark Clouds on the Horizon’ as European Channel M&A Continues

By | Managed Services News

The channel is consolidating at a fast rate, but the M&A landscape could soon change dramatically.

Economic trends in Europe indicate that private equity firms will likely offer lower multiples to prospective sellers.

So says John Holland, managing director of Corporate Finance Associates. Holland, whose investment banking firm advises midmarket businesses on M&A, said macroeconomic factors are depressing share prices even amongst the hottest technology companies. Thus, companies looking to sell their business shouldn’t be surprised if they receive lower valuations than what their peers reported getting last year.

Holland will participate in a session called “Channel M&A: Everything Today’s Leaders Need to Know,” alongside Total IT Technology Solutions’ Steve Dunmall and August Equity’s Mehul Patel. The session will happen at Channel Partners Europe, 14-15 June, in London.

In this preview, Holland shares insights with Channel Futures about trends impacting consolidation and private equity in Europe.

Channel Futures: How would you summarize the state of channel M&A in Europe? What trends are you seeing among both vendors and partners?

CFA's John Holland

CFA’s John Holland

John Holland: The volume and aggregate value of M&A transactions in Europe in 2021 were extraordinary. According to Pitchbook, the trend continued into [the first quarter of] 2022 with record volume and aggregate value. The robust demand for technology businesses with recurring revenues has elevated valuations to lofty levels as certain sectors have undergone rapid consolidation. However, there are dark clouds on the horizon.

Join 500+ MSPs, resellers and vendors at Channel Partners Europe, 14-15 June, in London. Part of London Tech Week, the event will feature 50+ channel leaders, innovators and experts. We’re expecting 1,500 attendees with whom you can discuss channel best practices and next-gen technology. Register now!

CF: Private equity is one of the most notable forces engaging in channel consolidation right now. What’s one important thing prospective sellers should know about these private equity firms?

JH: Debt is the fuel that propels acquisitions. The low interest rates of the past decade have driven a record volume of mergers and acquisitions. Private equity firms utilize leverage to acquire businesses. Leverage boosts the return on investment in ordinary macroeconomic scenarios. However, as the global economy faces extraordinarily high inflation, interest rates are rising dramatically worldwide, thereby elevating the cost of capital for private equity firms. Meanwhile, the risk of recession seems to be rising as higher fuel costs dampen economic activity. In this macroeconomic environment with higher risk of recession and higher interest rates, private equity firms are likely to adopt financial models with lower valuations. Business owners who are contemplating selling their businesses need to understand that the high multiples on EBITDA (earnings before interest, taxes, depreciation, and amortization) of the past will likely decline.

The public equities market for technology shares might be a harbinger for valuations of privately held technology services firms. Even hot cybersecurity and cloud technology companies like Crowdstrike, Zscaler, and Microsoft have depressed share prices now. In the European IT services area, major players like SoftwareOne, Computacenter and Softcat are way below their 52-week highs.

CF: What’s one key question a prospective seller should ask a prospective buyer, and vice versa?

JH: Sellers of businesses spend an enormous amount of time providing prospective acquirers with financial documents and other confidential details about the sellers’ businesses. Before providing any prospective acquirer with any information, a confidentiality agreement should be executed. Prospective sellers of businesses should ask prospective acquirers to demonstrate the financial capacity necessary for the acquisition. Also, it is important for the seller of a business to understand the goals of the acquirer, the potential synergy with the acquirer, the acquirer’s expectation for the role (if any) of the seller in the acquired business, and the acquirer’s plan (if any) to integrate the seller’s business into a larger entity. Sometimes acquisitions involve the seller rolling over equity into the acquirer’s business. Rolling over equity requires extensive due diligence on the acquirer’s business – just like in any other investment.

CF: Is there anything else you’d like to add?

JH: The best way for a business owner to maximize the value of his/her business on the sale of the business is to have an investment banker orchestrate a confidential auction-like process that pits prospective acquirers against each other. Negotiations between a business owner and a private equity firm are asymmetrical. That’s because private equity firms have teams of legal and financial advisers with years of experience in mergers and acquisitions. Sellers of businesses should level the field by seeking legal and financial guidance from experts.

Jun 03

‘Dark Clouds on the Horizon’ as European Channel M&A Continues

By | Managed Services News

The channel is consolidating at a fast rate, but the M&A landscape could soon change dramatically.

Economic trends in Europe indicate that private equity firms will likely offer lower multiples to prospective sellers.

So says John Holland, managing director of Corporate Finance Associates. Holland, whose investment banking firm advises midmarket businesses on M&A, said macroeconomic factors are depressing share prices even amongst the hottest technology companies. Thus, companies looking to sell their business shouldn’t be surprised if they receive lower valuations than what their peers reported getting last year.

Holland will participate in a session called “Channel M&A: Everything Today’s Leaders Need to Know,” alongside Total IT Technology Solutions’ Steve Dunmall and August Equity’s Mehul Patel. The session will happen at Channel Partners Europe, 14-15 June, in London.

In this preview, Holland shares insights with Channel Futures about trends impacting consolidation and private equity in Europe.

Channel Futures: How would you summarize the state of channel M&A in Europe? What trends are you seeing among both vendors and partners?

CFA's John Holland

CFA’s John Holland

John Holland: The volume and aggregate value of M&A transactions in Europe in 2021 were extraordinary. According to Pitchbook, the trend continued into [the first quarter of] 2022 with record volume and aggregate value. The robust demand for technology businesses with recurring revenues has elevated valuations to lofty levels as certain sectors have undergone rapid consolidation. However, there are dark clouds on the horizon.

Join 500+ MSPs, resellers and vendors at Channel Partners Europe, 14-15 June, in London. Part of London Tech Week, the event will feature 50+ channel leaders, innovators and experts. We’re expecting 1,500 attendees with whom you can discuss channel best practices and next-gen technology. Register now!

CF: Private equity is one of the most notable forces engaging in channel consolidation right now. What’s one important thing prospective sellers should know about these private equity firms?

JH: Debt is the fuel that propels acquisitions. The low interest rates of the past decade have driven a record volume of mergers and acquisitions. Private equity firms utilize leverage to acquire businesses. Leverage boosts the return on investment in ordinary macroeconomic scenarios. However, as the global economy faces extraordinarily high inflation, interest rates are rising dramatically worldwide, thereby elevating the cost of capital for private equity firms. Meanwhile, the risk of recession seems to be rising as higher fuel costs dampen economic activity. In this macroeconomic environment with higher risk of recession and higher interest rates, private equity firms are likely to adopt financial models with lower valuations. Business owners who are contemplating selling their businesses need to understand that the high multiples on EBITDA (earnings before interest, taxes, depreciation, and amortization) of the past will likely decline.

The public equities market for technology shares might be a harbinger for valuations of privately held technology services firms. Even hot cybersecurity and cloud technology companies like Crowdstrike, Zscaler, and Microsoft have depressed share prices now. In the European IT services area, major players like SoftwareOne, Computacenter and Softcat are way below their 52-week highs.

CF: What’s one key question a prospective seller should ask a prospective buyer, and vice versa?

JH: Sellers of businesses spend an enormous amount of time providing prospective acquirers with financial documents and other confidential details about the sellers’ businesses. Before providing any prospective acquirer with any information, a confidentiality agreement should be executed. Prospective sellers of businesses should ask prospective acquirers to demonstrate the financial capacity necessary for the acquisition. Also, it is important for the seller of a business to understand the goals of the acquirer, the potential synergy with the acquirer, the acquirer’s expectation for the role (if any) of the seller in the acquired business, and the acquirer’s plan (if any) to integrate the seller’s business into a larger entity. Sometimes acquisitions involve the seller rolling over equity into the acquirer’s business. Rolling over equity requires extensive due diligence on the acquirer’s business – just like in any other investment.

CF: Is there anything else you’d like to add?

JH: The best way for a business owner to maximize the value of his/her business on the sale of the business is to have an investment banker orchestrate a confidential auction-like process that pits prospective acquirers against each other. Negotiations between a business owner and a private equity firm are asymmetrical. That’s because private equity firms have teams of legal and financial advisers with years of experience in mergers and acquisitions. Sellers of businesses should level the field by seeking legal and financial guidance from experts.

Jun 03

‘Dark Clouds on the Horizon’ as European Channel M&A Continues

By | Managed Services News

The channel is consolidating at a fast rate, but the M&A landscape could soon change dramatically.

Economic trends in Europe indicate that private equity firms will likely offer lower multiples to prospective sellers.

So says John Holland, managing director of Corporate Finance Associates. Holland, whose investment banking firm advises midmarket businesses on M&A, said macroeconomic factors are depressing share prices even amongst the hottest technology companies. Thus, companies looking to sell their business shouldn’t be surprised if they receive lower valuations than what their peers reported getting last year.

Holland will participate in a session called “Channel M&A: Everything Today’s Leaders Need to Know,” alongside Total IT Technology Solutions’ Steve Dunmall and August Equity’s Mehul Patel. The session will happen at Channel Partners Europe, 14-15 June, in London.

In this preview, Holland shares insights with Channel Futures about trends impacting consolidation and private equity in Europe.

Channel Futures: How would you summarize the state of channel M&A in Europe? What trends are you seeing among both vendors and partners?

CFA's John Holland

CFA’s John Holland

John Holland: The volume and aggregate value of M&A transactions in Europe in 2021 were extraordinary. According to Pitchbook, the trend continued into [the first quarter of] 2022 with record volume and aggregate value. The robust demand for technology businesses with recurring revenues has elevated valuations to lofty levels as certain sectors have undergone rapid consolidation. However, there are dark clouds on the horizon.

Join 500+ MSPs, resellers and vendors at Channel Partners Europe, 14-15 June, in London. Part of London Tech Week, the event will feature 50+ channel leaders, innovators and experts. We’re expecting 1,500 attendees with whom you can discuss channel best practices and next-gen technology. Register now!

CF: Private equity is one of the most notable forces engaging in channel consolidation right now. What’s one important thing prospective sellers should know about these private equity firms?

JH: Debt is the fuel that propels acquisitions. The low interest rates of the past decade have driven a record volume of mergers and acquisitions. Private equity firms utilize leverage to acquire businesses. Leverage boosts the return on investment in ordinary macroeconomic scenarios. However, as the global economy faces extraordinarily high inflation, interest rates are rising dramatically worldwide, thereby elevating the cost of capital for private equity firms. Meanwhile, the risk of recession seems to be rising as higher fuel costs dampen economic activity. In this macroeconomic environment with higher risk of recession and higher interest rates, private equity firms are likely to adopt financial models with lower valuations. Business owners who are contemplating selling their businesses need to understand that the high multiples on EBITDA (earnings before interest, taxes, depreciation, and amortization) of the past will likely decline.

The public equities market for technology shares might be a harbinger for valuations of privately held technology services firms. Even hot cybersecurity and cloud technology companies like Crowdstrike, Zscaler, and Microsoft have depressed share prices now. In the European IT services area, major players like SoftwareOne, Computacenter and Softcat are way below their 52-week highs.

CF: What’s one key question a prospective seller should ask a prospective buyer, and vice versa?

JH: Sellers of businesses spend an enormous amount of time providing prospective acquirers with financial documents and other confidential details about the sellers’ businesses. Before providing any prospective acquirer with any information, a confidentiality agreement should be executed. Prospective sellers of businesses should ask prospective acquirers to demonstrate the financial capacity necessary for the acquisition. Also, it is important for the seller of a business to understand the goals of the acquirer, the potential synergy with the acquirer, the acquirer’s expectation for the role (if any) of the seller in the acquired business, and the acquirer’s plan (if any) to integrate the seller’s business into a larger entity. Sometimes acquisitions involve the seller rolling over equity into the acquirer’s business. Rolling over equity requires extensive due diligence on the acquirer’s business – just like in any other investment.

CF: Is there anything else you’d like to add?

JH: The best way for a business owner to maximize the value of his/her business on the sale of the business is to have an investment banker orchestrate a confidential auction-like process that pits prospective acquirers against each other. Negotiations between a business owner and a private equity firm are asymmetrical. That’s because private equity firms have teams of legal and financial advisers with years of experience in mergers and acquisitions. Sellers of businesses should level the field by seeking legal and financial guidance from experts.

Jun 03

‘Dark Clouds on the Horizon’ as European Channel M&A Continues

By | Managed Services News

The channel is consolidating at a fast rate, but the M&A landscape could soon change dramatically.

Economic trends in Europe indicate that private equity firms will likely offer lower multiples to prospective sellers.

So says John Holland, managing director of Corporate Finance Associates. Holland, whose investment banking firm advises midmarket businesses on M&A, said macroeconomic factors are depressing share prices even amongst the hottest technology companies. Thus, companies looking to sell their business shouldn’t be surprised if they receive lower valuations than what their peers reported getting last year.

Holland will participate in a session called “Channel M&A: Everything Today’s Leaders Need to Know,” alongside Total IT Technology Solutions’ Steve Dunmall and August Equity’s Mehul Patel. The session will happen at Channel Partners Europe, 14-15 June, in London.

In this preview, Holland shares insights with Channel Futures about trends impacting consolidation and private equity in Europe.

Channel Futures: How would you summarize the state of channel M&A in Europe? What trends are you seeing among both vendors and partners?

CFA's John Holland

CFA’s John Holland

John Holland: The volume and aggregate value of M&A transactions in Europe in 2021 were extraordinary. According to Pitchbook, the trend continued into [the first quarter of] 2022 with record volume and aggregate value. The robust demand for technology businesses with recurring revenues has elevated valuations to lofty levels as certain sectors have undergone rapid consolidation. However, there are dark clouds on the horizon.

Join 500+ MSPs, resellers and vendors at Channel Partners Europe, 14-15 June, in London. Part of London Tech Week, the event will feature 50+ channel leaders, innovators and experts. We’re expecting 1,500 attendees with whom you can discuss channel best practices and next-gen technology. Register now!

CF: Private equity is one of the most notable forces engaging in channel consolidation right now. What’s one important thing prospective sellers should know about these private equity firms?

JH: Debt is the fuel that propels acquisitions. The low interest rates of the past decade have driven a record volume of mergers and acquisitions. Private equity firms utilize leverage to acquire businesses. Leverage boosts the return on investment in ordinary macroeconomic scenarios. However, as the global economy faces extraordinarily high inflation, interest rates are rising dramatically worldwide, thereby elevating the cost of capital for private equity firms. Meanwhile, the risk of recession seems to be rising as higher fuel costs dampen economic activity. In this macroeconomic environment with higher risk of recession and higher interest rates, private equity firms are likely to adopt financial models with lower valuations. Business owners who are contemplating selling their businesses need to understand that the high multiples on EBITDA (earnings before interest, taxes, depreciation, and amortization) of the past will likely decline.

The public equities market for technology shares might be a harbinger for valuations of privately held technology services firms. Even hot cybersecurity and cloud technology companies like Crowdstrike, Zscaler, and Microsoft have depressed share prices now. In the European IT services area, major players like SoftwareOne, Computacenter and Softcat are way below their 52-week highs.

CF: What’s one key question a prospective seller should ask a prospective buyer, and vice versa?

JH: Sellers of businesses spend an enormous amount of time providing prospective acquirers with financial documents and other confidential details about the sellers’ businesses. Before providing any prospective acquirer with any information, a confidentiality agreement should be executed. Prospective sellers of businesses should ask prospective acquirers to demonstrate the financial capacity necessary for the acquisition. Also, it is important for the seller of a business to understand the goals of the acquirer, the potential synergy with the acquirer, the acquirer’s expectation for the role (if any) of the seller in the acquired business, and the acquirer’s plan (if any) to integrate the seller’s business into a larger entity. Sometimes acquisitions involve the seller rolling over equity into the acquirer’s business. Rolling over equity requires extensive due diligence on the acquirer’s business – just like in any other investment.

CF: Is there anything else you’d like to add?

JH: The best way for a business owner to maximize the value of his/her business on the sale of the business is to have an investment banker orchestrate a confidential auction-like process that pits prospective acquirers against each other. Negotiations between a business owner and a private equity firm are asymmetrical. That’s because private equity firms have teams of legal and financial advisers with years of experience in mergers and acquisitions. Sellers of businesses should level the field by seeking legal and financial guidance from experts.

Jun 02

‘Dark Clouds on the Horizon’ as European Channel M&A Continues

By | Managed Services News

The channel is consolidating at a fast rate, but the M&A landscape could soon change dramatically.

Economic trends in Europe indicate that private equity firms will likely offer lower multiples to prospective sellers.

So says John Holland, managing director of Corporate Finance Associates. Holland, whose investment banking firm advises midmarket businesses on M&A, said macroeconomic factors are depressing share prices even amongst the hottest technology companies. Thus, companies looking to sell their business shouldn’t be surprised if they receive lower valuations than what their peers reported getting last year.

Holland will participate in a session called “Channel M&A: Everything Today’s Leaders Need to Know,” alongside Total IT Technology Solutions’ Steve Dunmall and August Equity’s Mehul Patel. The session will happen at Channel Partners Europe, 14-15 June, in London.

In this preview, Holland shares insights with Channel Futures about trends impacting consolidation and private equity in Europe.

Channel Futures: How would you summarize the state of channel M&A in Europe? What trends are you seeing among both vendors and partners?

CFA's John Holland

CFA’s John Holland

John Holland: The volume and aggregate value of M&A transactions in Europe in 2021 were extraordinary. According to Pitchbook, the trend continued into [the first quarter of] 2022 with record volume and aggregate value. The robust demand for technology businesses with recurring revenues has elevated valuations to lofty levels as certain sectors have undergone rapid consolidation. However, there are dark clouds on the horizon.

Join 500+ MSPs, resellers and vendors at Channel Partners Europe, 14-15 June, in London. Part of London Tech Week, the event will feature 50+ channel leaders, innovators and experts. We’re expecting 1,500 attendees with whom you can discuss channel best practices and next-gen technology. Register now!

CF: Private equity is one of the most notable forces engaging in channel consolidation right now. What’s one important thing prospective sellers should know about these private equity firms?

JH: Debt is the fuel that propels acquisitions. The low interest rates of the past decade have driven a record volume of mergers and acquisitions. Private equity firms utilize leverage to acquire businesses. Leverage boosts the return on investment in ordinary macroeconomic scenarios. However, as the global economy faces extraordinarily high inflation, interest rates are rising dramatically worldwide, thereby elevating the cost of capital for private equity firms. Meanwhile, the risk of recession seems to be rising as higher fuel costs dampen economic activity. In this macroeconomic environment with higher risk of recession and higher interest rates, private equity firms are likely to adopt financial models with lower valuations. Business owners who are contemplating selling their businesses need to understand that the high multiples on EBITDA (earnings before interest, taxes, depreciation, and amortization) of the past will likely decline.

The public equities market for technology shares might be a harbinger for valuations of privately held technology services firms. Even hot cybersecurity and cloud technology companies like Crowdstrike, Zscaler, and Microsoft have depressed share prices now. In the European IT services area, major players like SoftwareOne, Computacenter and Softcat are way below their 52-week highs.

CF: What’s one key question a prospective seller should ask a prospective buyer, and vice versa?

JH: Sellers of businesses spend an enormous amount of time providing prospective acquirers with financial documents and other confidential details about the sellers’ businesses. Before providing any prospective acquirer with any information, a confidentiality agreement should be executed. Prospective sellers of businesses should ask prospective acquirers to demonstrate the financial capacity necessary for the acquisition. Also, it is important for the seller of a business to understand the goals of the acquirer, the potential synergy with the acquirer, the acquirer’s expectation for the role (if any) of the seller in the acquired business, and the acquirer’s plan (if any) to integrate the seller’s business into a larger entity. Sometimes acquisitions involve the seller rolling over equity into the acquirer’s business. Rolling over equity requires extensive due diligence on the acquirer’s business – just like in any other investment.

CF: Is there anything else you’d like to add?

JH: The best way for a business owner to maximize the value of his/her business on the sale of the business is to have an investment banker orchestrate a confidential auction-like process that pits prospective acquirers against each other. Negotiations between a business owner and a private equity firm are asymmetrical. That’s because private equity firms have teams of legal and financial advisers with years of experience in mergers and acquisitions. Sellers of businesses should level the field by seeking legal and financial guidance from experts.

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