Ensono CEO on KKR ownership, seeing opportunity in IBM's services spin-off and if an IPO is part of the long-term plan

Jeff VonDeylen lifts the lid on future ambitions after selling up to KKR in reported $1.7bn deal

Investment from private equity giant KKR will bring "new thinking and new opportunities" to Ensono according to its CEO Jeff VonDeylen.

Ensono last week announced that it has sold up to KKR in a deal worth a reported $1.7bn.

KKR manages $252bn-worth of assets and its portfolio of companies generate around $238bn in annual revenues.

The investment giant invests in channel firms including SoftwareOne and Optiv and vendors including Darktrace, Epicor and Cherwell.

Speaking to CRN, Ensono CEO Jeff VonDeylen said the KKR acquisition will help Ensono "go faster" in executing in the market and taking share from its larger competitors including IBM, Deloitte and Accenture.

"These companies have been around for 100 years and are all $10bn-plus companies. So we're really that Little Engine That Could and so it's exciting stuff for us.

"I think for our people, it's just a good validation and a good jumping off point from where we were to keep doing what we're doing. And if we can go faster, let's do that. KKR is certainly very interested in investing in the business, so that's going to create some nice opportunities for us.

VonDeylen added that he believes IBM's impending services spin-off will also present new opportunities for Ensono to win over dissatisfied customers from its larger competitor.

"We're focused on the client and not on internal politics and how to reorganise. IBM are spending a lot of time focussing internally and we're spending a lot of time focusing externally, so that may mean some opportunities for us."

Ensono was born through a carve-out process from data marketing company Acxiom in 2015. The business was initially offloaded to M/C Partners and Charlesbank Capital for just $190m.

With its sale to KKR worth a reported $1.7bn, the business has increased in value by almost 10 times since it first separated from its largest parent.

VonDeylen said Ensono shifting from a mainframe services company to a hybrid IT provider has helped it rapidly grow in value.

But he also added the US firm was "probably a little lucky", too.

"We're good, but we also we operate in a great market," he said.

"The market value of a business that is growing and has a vision is going to just get a higher multiple than a business that was just carved out and underperforming and didn't really have a strategy

"When we bought this business we didn't have a public cloud strategy. So we helped bring a little bit of vision to the business about how we participate in a broader set of services that our clients think about - so that's certainly been helpful. Public cloud is obviously where a lot of clients are doing new development and thinking about where their applications land.

"So I think having that vision has helped. But you can have a great vision but that's useless if you can't execute. So I think we did a good job of having a vision but also executing that vision and growing."

After several acquisitions, including Wipro's hosted datacentre business, UK IT services firm Attenda and UK Microsoft Cloud partner Inframon, the building blocks are now in place to rapidly accelerate the Ensono business, claims the CEO.

Ensono has grown from a business with around $190m in revenues from when it was first sold five years ago to a company that is expecting to post more than $700m in sales in 2021.

"We're super excited about this next phase for us. We've had a great experience the first five years, which were more about getting the building blocks and now it's about how do we take what we've built and really create something that's special, that's recognised," he said.

Taking a longer-tern view of Ensono's ownership, VonDeylen said an IPO could be a "potential option" for the business.

"I've been part of a small publicly traded company, and it was tough. So being out of the public market has been really great.

"But as we think about growth, that certainly needs to be an option. If the IPO or stock market is as hot in four or five years as it is today then I'm sure that'll be one of the options that we absolutely look at.

There's some pretty interesting things happening in the public market. It feels a little bit more like it did in the late 90s or early 2000s. Back then, you were owned by private equity then you naturally exited to IPO. Now there's such a big private market; going from one PE firm to another didn't really exist back then. But as we grow in size that probably limits the number of players who can do a transaction at that level. So certainly an IPO would certainly be one of the things we'll have to look at."

The CEO said that bringing KKR on board will help raise the overall profile of the Ensono name in the market - especially when it's up against established GSIs.

"If you think about it, most people don't know the Ensono name. Even in IT, people that we talk to every day, a lot of times we're introduced and it's the first time they're being introduced to us.

"But if you think about the internet age and the brands that exist today, they frankly weren't even companies 20 years ago - Tesla or Facebook for example. We know it can be done, we just need to figure out how to do it more nimbly."

‘We've come through the pandemic a much better business than when we entered it'

A little over a week before announcing its acquisition by KKR, Ensono acquired a UK-based cloud native consultancy firm called Amido.

The AWS, Google and Microsoft partner adds application development and integration capabilities to the Ensono business as well as offerings around PaaS, SaaS and containers.

Ensono's managing director for Europe, Barney Taylor, said Amido is an "entirely different" business to what Ensono offers.

"They're not additive to what we do, they are putting completely new capabilities into Ensono - where we start with the infrastructure, Amido just pick that up."

Taylor added that the Amido acquisition probably wouldn't have gone ahead if Ensono hadn't posted such a strong financial 2020 amid the global pandemic.

"The overall Ensono business has come through the pandemic, or the latter stages of it, as a much, much better business than when it came into it," he said.

"And not just in dollars; we really have accelerated our business strongly during 2020, and the KKR acquisition is a result of that.

"The way we facilitated home working and remote working, but also the culture of the business during the pandemic - we learned lessons, and I think Ensono is a better business, a better place to be in and a better place to work as a result of that, and that's super important.

"We have a well motivated, progressive workforce. And I think Ensono did itself proud through 2020."