Global IT consulting firm Emtec is seeking to acquire consulting startups; Oracle and Salesforce cloud partners; and MSPs. The acquisition hunt is backed by private equity firm Kelso & Company, which recently acquired majority control of Emtec. Financial terms of that deal were not disclosed.
The Kelso-Emtec M&A deal is number 805 that ChannelE2E has covered so far in 2022.
Kelso Acquires Emtec: IT Consulting Business Background
Emtec, founded in 1995, is based in Jacksonville, Florida. The company has 1,407 employees listed on LinkedIn. Key areas of expertise include:
- Applications (Enterprise, custom, mobile and cloud);
- Intelligent automation;
- Cybersecurity; and
- Infrastructure services.
Emtec also is seeking to make acquisitions. M&A focus areas include:
- Consulting firms that support cloud application migrations, mobile technology services, big data and analytics. Startups should have a path to profitability within one to two years.
- Enterprise application partners that have expertise in Oracle (minimum $3 million in EBITDA) or Salesforce (minimum $2 million in EBITDA) applications.
- Application development MSPs with at least $4 million in EBITDA.
- Infrastructure MSPs that have at least $5 million in EBITDA.
- Vertical market infrastructure MSPs in the education and high-end retail sectors.
Emtec’s new majority owner, Kelso, has investment experience in the IT services market. Former ownership positions include Sirius Computer Solutions, a $3.5 billion (gross sales) data center and IT service provider that Kelso sold in July 2019.
Kelso, founded in 1971, is based in New York, New York. The company has raised nine private equity funds — spanning $12 billion in capital — since 1980.
Emtec Executive Team Unchanged, New Chairman Arrives
Emtec’s existing management team, led by CEO Sunil Misra, will continue to lead the business. The Emtec team also remains “significant investors in the company alongside Kelso,” though ownership percentages and deal valuation terms were not disclosed.
Also of note: John Castleman, formerly CEO of digital services firms Mobiquity and Alliance Global Services, will join Emtec’s board of directors as chairman. Former Chairman Dinesh Desai remains a board member and a “meaningful” investor in the company, the firms said.
The Kelso deal arrives one year after Emtec completed a strategic refinancing with Prudential Private Capital in September 2021.
Kelso Acquires Emtec: Executive Perspectives
In a prepared statement about the deal, Emtec CEO Sunil Misra said:
“Emtec’s success has been made possible by our talented associates and our valued clients who trust Emtec with their most demanding digital engagements. We have developed a unique culture over our history, and we are excited to welcome a partner in Kelso who shares our passion for customer service, dedication to our associates, and commitment to investing for growth.”
Added former chairman and current board member Dinesh Desai:
“I am very proud of our amazing team and happy that our new partner, Kelso, shares our ethos of ‘client for life’. I firmly believe the Kelso partnership will help our associates scale new heights and be the best at what we do, while having fun doing it.”
Noted new Chairman John Castleman:
“Emtec has an outstanding reputation for providing highly complex digital solutions and services. We are focused on continuing to develop these differentiated capabilities while thoughtfully broadening our offering over time to address the diverse digital needs of our customers.”
Said Hank Mannix, managing director at Kelso:
“At Kelso, we look for opportunities to back high-quality managers with successful track records, and we are thrilled to partner with Sunil, John, and the Emtec leadership team.”
Concluded Alec Hufnagel, managing director at Kelso.
“We are excited to support the company with additional resources and capital as it accelerates an already impressive growth trajectory in a highly attractive market.”