The US company’s acquisition of Ergo is either a coincidence or a sign of something bigger, says Billy MacInnes
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Bob Cagnazzi, Presidio
A lot can happen in five years. Think back to November 2020. Perhaps the biggest news was that Donald Trump had lost the US presidential election to Joe Biden, although that only just surpassed Baby Shark by Pinkfong becoming the most-watched video on YouTube with over 7.04 billion views.
That was also the month that US-based IT services and solutions provider Presidio Inc, acquired Irish IT procurement and services company, Arkphire, in a deal reportedly worth €120 million. Presidio had made a broad range of acquisitions since its formation in 2003, but Arkphire marked its first outside the US.
At the time, the takeover was slightly surprising because Arkphire had bought another Irish channel partner, Trilogy Technologies Group, less than a year before. A few months later, it acquired Singapore-based Generic Technologies to support its expansion into the Asia Pacific market.
So here we are five years later in the wake of another Presidio acquisition of another well-known and long-established Irish company, Ergo, for around €100 million according to some estimates. Before we get to that, let’s take a quick look at what has happened to Presidio in the interim.
A year before it first came to Ireland, Presidio was taken private by BC Partners in a deal worth $2.1 billion. In April last year, Clayton Dubilier & Rice (CD&R) acquired a majority ownership position in Presidio from BC Partners, which would retain a minority interest in the company. Both BC Partners and CDR are known for their European focus.
At the time of the change in ownership, Presidio CEO Bob Cagnazzi (pictured) told CRN: “There is a lot of dry power there for us to accelerate our growth, making the right kind of acquisitions that will provide advanced services, greater geographic coverage or provide even more scale from a people standpoint. We hope to be extremely active growing the business organically and inorganically through acquisitions like we have done in the past. We think we can move a lot faster with a lot more dry power than we have had in the past.”
No, before you ask, I haven’t come across “dry power” before either but I am wondering if Cagnazzi actually said “dry powder” and it was transcribed incorrectly.
Notably, Presidio appeared to ramp up its acquisitions after the deal with CDR. In the intervening period, it has taken over four companies in the US, transACT Technology Solutions in the UK and Ergo in Ireland. The company, which has gross annual revenue of $6.5bn and over 6,000 customers, now has offices in the US, India, Singapore, Ireland and the UK.
When Presidio took over Arkphire, Cagnazzi described it as “a platform to scale our ambitions in Europe and Asia Pacific”. Following the acquisition of Ergo, he stated it was “an important step in Presidio’s European growth” that would enhance its capabilities in a key market, add proven leadership and expertise, “and position us to deliver even greater value to clients across the region”.
It also appears to fit very nicely with his earlier statement to CRN that any acquisition would provide advanced services, greater geographic coverage or even more scale from a people standpoint.
That certainly seems to have been the focus for Brid Graham, senior vice president, Europe and Asia Pacific, Presidio. Describing Ireland as “a critical technology hub for Europe”, she said the acquisition of Ergo would provide “the talent and scale to better serve local and public sector clients and the hundreds of multinational firms that have chosen Ireland as their European base”.
The fact that, to date, Presidio’s European ambitions have been focused largely on two companies based here suggests that it fully appreciates the strategic value of Ireland’s position within the EU. It can also be seen as a vote of confidence in the viability and stability of Irish channel businesses.
To paraphrase Oscar Wilde, to buy one Irish company may be regarded as an acquisition, to buy two looks like a strategy.