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September 29, 2017
martinwolf  Transaction Analysis
Sirius to Acquire Forsythe

Financial Information*
  • Financial Terms Not Disclosed
Transaction Facts
  • Sirius Computer Solutions has signed a definitive agreement to acquire $1B solution provider Forsythe Technology. The deal is expected to close on October 31. 
A New Giant in the Works
  • Significant Scale: The deal will create the 20th largest solution provider in North America, creating a 3,000 employee, $3.26B company. Additionally, the deal with strengthen Sirius's security practice. In light of increasing demand for security, the move is a smart play; not only is Forsythe one of the largest security integrators in North America, but also the two security practices will account for ~$510M combined. 
  • Strategic Play: Sirius president and CEO Joe Mertens has been a smart, strategic operator, while the private equity push from Kelso & Co. (Kelso acquired an equity interest in Sirius from Thoma Bravo and Harvey Najim in September 2015) has been a crucial advantage in supporting Sirius's acquisition spree in recent years. Since being acquired by Kelso, Sirius has made three acquisitions; in December 2016, Sirius acquired solution provider Continuum Worldwide and IBM infrastructure solutions provider thinkASG, while in April 2016, it acquired security-focused solution provider Force 3.  
  • Valuable Asset: Forsythe, a 100 percent employee-owned company with a diverse and broad portfolio, has also shown strong M&A activity; the company purchased 10 companies since 2001. For the last four years, sales have remained at ~$1.1B, and the company has been profitable for 46 consecutive years. In addition, its share price valuation in December 21, 2016 was the highest in its history. On top of strong revenues, Forsythe launched a multicloud private storage offering and a security incident and event management (SIEM)-as-a-Service offering. The company must navigate a unique leadership structure on top of margin pressure in the enterprise market.
  • Historical Advantage: Sirius has a long history of working with top companies. Sirius is IBM's largest value-added reseller in the US that serves medium to large enterprises, with more than 52% of Sirius's revenue coming from IBM's products and services. In addition, Sirius has several key partnerships; it is a Premier VMware Partner, a Platinum Partner with HPE and Intel, a Gold Partner with Cisco, Microsoft, and Trend Micro, and an AWS partner. The addition of Forsythe, a formidable Oracle partner, will help strengthen its brand even more; Forsythe holds key partnerships with Dell, IBM, VMware, HPE, Symantic, Cisco, Citrix, and NetApp as well. Furthermore, the company has over 40 Partner of the Year awards.
 
For more information about this potential transaction,  click here to read the CRN report.

*Financial Information from S&P Capital IQ. 

martinwolf was not the advisor in this transaction.

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With offices in the San Francisco Bay Area and New York, martinwolf is a leading M&A Advisory focused on middle market companies in the IT Services, IT Supply Chain, IT-Enabled Business Process Outsourcing and Software as a Service (SaaS) space. Since 1997, our team has completed more than 150 transactions in over 20 countries and sold seven divisions of Fortune 500 companies. 

 

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