PowerNet IT Solutions and Evolve IT have merged businesses, creating a managed services provider (MSP) with more than 50 years of market experience.
Effectively immediately, ARN can reveal that Daniel Williams - current CEO of PowerNet - will lead the combined entity, with Nick Moran - current managing director of Evolve IT - heading up key partnerships and alliances.
The merged business will create a multi-national MSP targeting small and mid-market customers, housing more than 90 employees across six offices in Australia and New Zealand.
“I look forward to serving a larger team as CEO and working with our new look leadership team to bring our strategy to life,” Williams said. “We will continue to focus on being an employer of choice and growing through strategic partnerships, merger and acquisition.”
According to Williams, the merger will also leverage both company’s "longstanding membership and involvement" with industry association HTG Peer Groups, which was acquired by ConnectWise in January 2018.
“Working alongside Nick and the team at Evolve IT via the HTG peer group has meant that we’ve had great visibility of each other’s businesses for quite some time,” Williams added. “The synergies and cultural alignment are undeniable and make for an exciting future together.”
At this stage, no decision has been made regarding the combined entity’s future branding, with a focus on “business as usual” whilst the integration is staged and completed over the coming months.
From a customer perspective, the new-look provider will continue to service clients across the key sectors of transport, not-for-profit and charity, retail and wellness industries.
“It’s exciting times ahead as we look to further strengthen our capabilities and offerings to help our clients achieve more," added Moran.
“Both PowerNet and Evolve IT have experienced significant growth over the past few years, including several acquisitions, and the combined entity will allow us to continue to expand our team further over coming months as we bring our teams together.”
Specific to technologies, the business also aims to capitalise on strategic vendor alliances with Microsoft, Sophos and Datto, through the delivery of IT managed and professional services.
Both headquartered in Melbourne, PowerNet was founded by Jacob Ohlson in 1994, while Evolve IT was established by Moran in 1993, creating more than 50 years of technology expertise in the process.
The agreement comes more than two years after PowerNet joined forces with Virage IT, as reported by ARN.
In addition, the deal kicks off M&A activity for 2019 in the local channel, following a year in which more than 30 technology providers were acquired in Australia, as part of a buying frenzy amounting to over $300 million.
With channel ownership swapping hands on a seemingly weekly basis, the transactions point to an industry in transition as executive leaders pursue growth and consolidation strategies in equal measure.
Furthermore, the deal adds weight to the prediction that MSPs are gearing up for an era of ownership change as the channel edges towards an all-out M&A frenzy.
Specifically, 70 per cent of MSPs are expected to explore buying, selling and merging options within the next five years with industry consolidation on the horizon.
“If you look around the industry, most MSPs are planning to either buy or sell,” said Arlin Sorensen, vice president of peer groups at ConnectWise.
According to Sorensen, when speaking during IT Nation Connect in Orlando, most technology providers are reaching a crossroads in which business owners are assessing legacy strategies.
“Everybody will exit their company at some point but it’s important to know what that legacy looks like,” Sorensen advised. “You need to begin to execute and prepare for this because M&A is a key way to grow your business.”