Aggressive TIG pursues London MSPs

Managed services provider ready to be catalyst for consolidation of its market

The Internet Group (TIG) plans to lead consolidation of the mid-market managed service provider (MSP) space by making an acquisition a year over the next four years.

TIG launched its BuymyIT.biz subsidiary in 2008 as a vehicle to negotiate with MSPs looking for an exit option.

It is now redoubling its efforts after witnessing a spike in enquiries from owner-managers looking to get the ball rolling on a sale. It claims to have received 25 inbound enquiries since the start of 2012 - treble the usual rate - and is now in dialogue with three or four of them.

Former BT Lynx boss Paul Edgeley, who joined TIG in 2009 to head up M&A strategy, said TIG would act as a catalyst for consolidation in the MSP space, particularly in the London area.

"There is definitely a shake-up happening in the managed services industry," he said. "Providers that rode out the worst of the recession are now seeing opportunities to sell at a suitable profit."

TIG managing director Adam Maurice (pictured) argued that many smaller MSPs are ready to join forces with a larger competitor that has made the investment TIG has in its infrastructure. This includes its service desk, which has a three-star Service Desk Institute certification.

"To get to our mid-term plan, we need to make three or four acquisitions, as it is very difficult to grow organically in this market," Maurice told ChannelWeb.

Candidates must have made or be in the process of making a transition to the mid-market, which is TIG's stronghold.

TIG, which counts Microsoft, Cisco, Dell and VMware as its major vendor partners, has access to a dedicated acquisition facility with NatWest.

"Finance is not the issue, it is just finding the right opportunities to bring the synergies we need to grow TIG," said Maurice.

TIG has made six acquisitions in its 12-year history but its last was back in 2008, in the form of £1m-turnover outfit Cybergate. With a projected turnover this year of £6.5m, TIG now has two offices in London and one in Birmingham.

"In the past we were looking at firms with £1m turnover but now they are typically larger," Maurice said. "We have ongoing conversations with companies ranging from £2.5m to £6m turnover."

Edgeley added: "With advances in networking technology and fledgling delivery models such as cloud, it makes sense to amalgamate expertise and create greater value from managed services."