January 28, 2025 – Dallas and Los Angeles. Investment banking firm Solganick & Co. (“Solganick”) has issued its latest mergers and acquisitions (M&A) report on the IT Solutions and VARs sector.
You can download the full report here: IT Solutions Providers Q4 2024 and 2025 Mergers Outlook
The following summarizes the report:
The IT Solutions Provider landscape continues its dynamic evolution, marked by a steady stream of mergers and acquisitions (M&A) in Q4 2024 and the start of 2025. This activity is driven by several factors, including the ongoing digital transformation wave, the rise of cloud computing and managed services, the increasing need for cybersecurity expertise, and more support for data centers due to the AI drive.
Key Trends Shaping M&A Activity:
Consolidation: The market is witnessing a trend towards consolidation, with larger players acquiring smaller ones to expand their geographic reach, service offerings, and customer base. This allows them to achieve economies of scale and offer more comprehensive solutions.
Specialization: Acquisitions are also being driven by the need to acquire niche capabilities in areas like cybersecurity, AI, data analytics, and cloud migration. This allows companies to differentiate themselves and cater to the evolving needs of their clients.
Private Equity Influence: Private equity firms continue to play a significant role in the M&A landscape, investing in promising IT solution providers and driving further consolidation.
Recent PE Investments include Clayton Dubilier & Rice’s acquisition of Presidio, Apax Funds acquisition of Thoughtworks, and TowerBrook Capital’s acquisition of CBTS.
Looking Ahead:
The M&A trend in the IT Solutions sector is expected to continue in the coming months, driven by factors such as:
The continued rise of Generative AI and AI Agents: As artificial intelligence continues to evolve, companies with expertise in this domain will be highly sought after, including providing infrastructure and solutions for new data centers to support massive AI and data analytics capabilities.
Cybersecurity Concerns: The increasing frequency and sophistication of cyberattacks will fuel demand for cybersecurity solutions and drive M&A activity in this space.
Cloud Adoption: The ongoing shift to cloud computing will continue to create opportunities for companies with cloud migration, data centers, and management capabilities.
M&A Activity, Q4 2024:
M&A activity in the IT Solutions Provider sector was active in Q4 2024, with many large companies acquiring smaller ones to add solutions expertise.
- We noted two acquisitions announced by Presidio in Q4: Contender Solutions and Kinney Group.
- World Wide Technology (WWT) acquisition of Canada based Softchoice for C$1.8B.
- CDW’s acquisition of AWS Premier Partner, Mission Cloud Services.
- Xerox acquisition of ITsavvy for $400M.
Solganick expects to see more consolidation in 2025 among the larger IT solutions providers, as well as acquisitions in cloud, cybersecurity, data analytics, managed services, and data center infrastructure solutions.
About Solganick:
Solganick is a data-driven investment bank and M&A advisory firm focused exclusively on software and IT services companies. For more information or to inquire about an M&A opportunity, please contact us.
