Genstar Announces Acquisition Of ConvergeOne
6/4/2007
Leading Business Communication Solutions Provider To Capitalize
On Technology Shift To Internet Protocol Systems
Contact: Chris Tofalli
914-834-4334
ctofalli@gencap.com
SAN FRANCISCO, June 4, 2007—Genstar Capital, LLC, a middle market private equity firm that focuses on investments in selected segments of the life science and healthcare services, industrial technology, business services and software sectors, today announced that it has partnered with management to acquire ConvergeOne (www.converge-one.com), one of the largest independent providers of business communications solutions in the U.S. Financial terms of the transaction were not disclosed.
ConvergeOne, headquartered in Coatesville, PA, is a leading value added solutions provider (VASP), serving as a critical link between OEMs and end users providing essential consulting and project management services related to custom design, installation, implementation and maintenance of communication solutions. ConvergeOne, through its family of national VASPs, offers a “one-stop” destination for its broad spectrum of valued customer relationships, providing in-depth technical expertise and total solution focus. Custom services include converged networks and unified communication solutions, call centers, system design, implementation, integration, maintenance, data storage and archiving and other professional services primarily for mid-sized and enterprise businesses.
“We continue to identify companies that have a leading edge in their respective industries and believe that ConvergeOne represents an optimal platform to capitalize on the major technology shift taking place in the business communications market,” said Darren Gold, a Managing Director of Genstar. “ConvergeOne has an outstanding management team that will continue to guide the company’s growth and we will work with them to determine how best to serve global companies that increasingly require advanced communications solutions and lower costs by sending voice, data and video over one network.”
John Stuart, founder and Chief Executive Officer of ConvergeOne, will continue to lead the company with the existing management team. Mr. Stuart has a proven track record of executing high growth strategies in fragmented industries where channel partners play an important role in the industry structure. As President of IKON Office Solutions he completed over 400 acquisitions during an eight-year period, growing revenues from $175 million to $5 billion.
Each of ConvergeOne’s three operating companies and subsequent acquisitions will continue to be led by its respective business founder, President and or CEO: North American Communications Resource, Inc., headquartered in Eagan, MN, headed by CEO and founder Tom Roles; Combest, based in Atlanta, whose CEO is Richard Pusbach; and S-1 IT Solutions, headquartered in Boise, Idaho, headed by CEO and founder Steven Sells. ConvergeOne anticipates 2007 consolidated revenues will exceed $300 million.
“ConvergeOne represents an outstanding opportunity to continue building the leading solutions provider to the U.S. enterprise business communications market on a national level,” said Mr. Stuart. “The migration to VoIP platforms is accelerating and we can achieve further growth by continuing to leverage our strategic customer relationships, deep technical skills, 24/7 in-house maintenance and services capabilities, and continue our geographic expansion. This strategy will meet head-on the explicit demands of our enterprise relationships to flatten and consolidate both their technology infrastructure and vendor networks. Genstar’s operating experience in this industry and their ability to help us target select acquisitions that can build scale and enhance services were key factors in our decision to partner with them.”
Avaya, a leader in the emerging Voice Over Internet Protocol (VoIP) space, is a key strategic partner for ConvergeOne, due in part to ConvergeOne’s family of leading VASPs with strong reputations, its large installed base and broadest offering of applications. In addition to the strategic relationship with Avaya, the ConvergeOne family also has strategic alliances with other global solution leaders including IBM, Cisco, Microsoft, and EMC.
Last year Genstar expanded its business services practice to include the software & IT services sector headed by Mark Hanson, an experienced software executive with more than 24 years of experience. Prior to becoming an Operating Partner at Genstar, Mr. Hanson helped to successfully build the operations of a number of software companies, including in his previous role as Senior Vice President for Corporate Development and Chief of Staff for Siebel Systems, Inc. He will serve as a director of ConvergeOne.
About Genstar Capital, LLC
Based in San Francisco, Genstar Capital (www.gencap.com) is a private equity investment firm that makes leveraged investments in quality middle-market companies. Genstar Capital works in partnership with management to transform its portfolio companies into industry-leading businesses. With more than $2 billion of committed capital under management and significant experience investing in businesses, Genstar focuses on selected segments of the life science and healthcare services, industrial technology, business services and software sectors.