TekLinks Makes Its Big Move To Dominate Fast-Growing Nashville Market, Snatches Up MSP Superstar Guidant Partners
CRN Exclusive by Steven Burke
TekLinks, which is already a Southeast technology services superpower, is significantly strengthening its position in the fast-growing Nashville, Tenn., market by acquiring its toughest competitor there -- Guidant Partners.
The acquisition of Nashville-based Guidant Partners, long considered a regional MSP superstar, increases TekLinks' Nashville revenue in one fell swoop by 50 percent, said TekLinks CEO Jim Akerhielm.
The deal gives Birmingham, Ala.-based TekLinks, which has a long-standing presence in Birmingham, Knoxville and Chattanooga, Tenn., a dominant technology services position in the Nashville market with about 60 technology services professionals helping business navigate the treacherous technology landscape.
"It's a game-changer for us," said Akerhielm. "It's arguably the fastest-growing market in the mid-South. It's now the biggest market we serve. For customers, this expands our service offerings with new high-touch capabilities."
Twenty-eight-year-old Guidant Partners is widely recognized as one of the top MSPs in the Tennessee market. The company provides 99.97 percent uptime and 98.9 percent service-level agreement resolution.
Terms of the transaction were not disclosed, but 90 percent of Guidant Partners' revenue is recurring-revenue-services-based.
"That is very, very unusual," said Akerhielm. "They have a long history of great customer relationships. Their whole go-to-market process with delivery and support is so tightly integrated and customer-friendly that it is really impressive."
TekLinks, No. 174 on the 2016 CRN Solution Provider 500, is now a $130 million company with well more than one-third of its annual sales from recurring revenue.
The acquisition significantly boosts TekLinks’ MSP prowess, said Akerhielm. "In addition to scale and geographic presence, they do some things better than we do," he said. "What they excel at is the very high-touch managed services model."
TekLinks plans to leverage Guidant Partners' "high-touch" MSP muscle to drive deeper into its key vertical market segments: health care and financial, said Akerhielm. "We want to grow the Guidant platform beyond the current customers into our vertical markets efforts in health care and financial," he said.
The Guidant Partners acquisition will be critical in expanding TekLinks' health-care presence – already its No. 1 vertical market. "Nashville is a big, big health-care market," said Akerhielm. "Those relationships are consultative and evolutionary. So having highly capable resources in the market to design and deliver is critical."
Akerhielm said TekLinks is committed to retaining all of the Guidant Partners' team.
However, Guidant Partners CEO Steve Burgess, who hailed TekLinks as a leader in the "next wave of managed IT services for companies," plans to step aside after a consultative period with the company. He called the deal a case of "quality meeting quality."
The Guidant Partners acquisition represents the third deal engineered by Akerhielm since he took the helm of TekLinks four years ago.
Last year, TekLinks acquired fast-growing cloud services player Claris Networks, based in Knoxville, which provides a complete outsourced cloud service. That deal increased TekLinks’ recurring revenue by a whopping 60 percent.
Before that, in 2013, Akerhielm was the driving force behind TekLinks’ acquisition of health-care managed services provider ClinicAnywhere.
Akerhielm, who has reviewed hundreds of potential acquisition targets, said those three deals are the cream of the crop in a market filled with companies that are not up to snuff.
TekLinks itself has benefited from a majority ownership stake from Pamlico Capital, a Charlotte, N.C., private equity firm that just raised $910 million for its Fund IV.
"Their track record speaks for itself," said Akerhielm of Pamlico Capital. "They have been instrumental in making investments in TekLinks to enable our growth and on providing the intellectual capital associated with doing those acquisitions. They are a trusted partner."
TekLinks is driving profit margin expansion with strong services and customer relationships, said Akerhielm, adding he is extremely optimistic about the potential for profit and sales growth in 2017.
"We have an unbelievably talented group of professional engineers that are architecting our technology solutions," said Akerhielm. "We are extremely bullish. Economic growth in the Southeast is above the national average. There are not many competitors that can deliver really good on-premise solutions for certain applications, host other applications in local data centers, and then facilitate other applications in the public cloud. We do all three. We are very bullish on that model and the markets that we are in."
Article by Steven Burke and published on CRN (http://www.crn.com)
Pamlico Capital is a private equity firm founded in 1988 that invests in growing middle market companies in North America. Pamlico Capital seeks control-oriented growth equity investments of up to $200 million alongside founders and proven leaders in its target industries: business & technology services, communications, and healthcare. The firm, based in Charlotte, NC, has assets under management of approximately $4 billion. For additional information, please visit www.pamlicocapital.com.