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August 5, 2016
martinwolf Transaction Analysis
Partners Group to Acquire Systems Maintenance Services
 
Financial Information
  • Not Disclosed
Transaction Facts
  • Swiss global private equity firm Partners Group (SWX:PGHN) announced today that it agreed to acquire US third-party maintenance (TPM) provider Systems Maintenance Services (SMS) for an undisclosed amount.
  • SMS is being sold by Thomas H. Lee Partners, whose investment in SMS dates from 2010, and Summit Partners, which invested in SMS in 2013.
  • The transaction brings Partners Group a new platform company that is a market leader in the TPM space, having expanded since its founding in 1981 to service a global client base of 3,000 through more than 100 service centers. The company has locations across North America, Europe and Asia-Pacific and services equipment from all major IT original equipment manufacturers.

A Strong Move to Secure A Market Leader

  • TPM is Increasingly In Vogue: As product lifespans grow longer and margins are constrained, companies are holding off on large capital expenditures such as OEM purchases. Instead, they are turning to TPM providers to get functional equipment from multiple vendors at lower costs, along with their associated services.
  • Recognized in its Space: SMS has been recognized by Gartner and other leading research organizations as a repeat "Top Performer" in the TPM market, particularly recognizing its Data Center and Network capabilities as well as its strong service delivery strategy.
  • Size Matters: TPM today is largely a fragmented space that is ripe for consolidation, with Gartner finding that many providers generate revenues of less than $10M from TPM activity. This is substantially lower than the revenue generated by SMS, whose 2015 revenue was approximately $245 million. Scale can be critical for TPM providers, which benefit from stronger vendor relationships and wider global coverage as they achieve economies of scale.
  • Latest in an Active Space: The TPM space has been very active recently. SMS itself has made 8 acquisitions since 2010, building its Asian and European presences and establishing new offerings in the voice, video and cloud spaces. In January, fellow TPM provider SEI acquired Compu-Fix, a smaller TPM provider serving the Pittsburgh market. We've also seen significant interest by private equity players attracted by the high margins and increasing demand - GTCR acquired TPM provider Park Place in Nov. 2015.
For more information about this transaction,  click here to read the press release.

martinwolf was not the advisor in this transaction.

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With offices in New York and the San Francisco Bay Area, 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 140 transactions in nineteen countries and sold seven divisions of Fortune 500 companies. 

 

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