Konica Minolta Business Solutions has acquired All Covered for an undisclosed amount, according to both companies.
All Covered will keep its name and become a division of Konica Minolta Business Solutions, as it looks to expand its managed print services business into a broader managed IT services portfolio, said Rick Taylor, senior executive vice president and COO of Konica Minolta Business Solutions.
"This is the culmination of the direction the company is trying to head. This allows us to help customers with every aspect of their IT system," Taylor said. "We want to manage the information workflow from hard copy to storage and retrieval, the whole lifecycle of information."
US-based All Covered, totalled about $US60 million in sales last year in 22 cities, according to Konica Minolta. The vendor's goal is to acquire more MSP business to expand geographically and create a local presence nationwide to both end users and to its channel dealer base. Taylor hopes to grow Konica Minolta's managed IT business by 100 percent over the next 12 to 18 months, he said.
"It's an $US18 billion managed IT market but it's very fragmented. This gives us the opportunity to enter the business in a big way. It gives us a strong platform to grow from," Taylor said. "There are synergies available by selling these services both direct and through our indirect channel to the 200,000 SMB customers we have today."
Todd Croteau, CEO of All Covered, said the acquisition by Konica Minolta will help the company more quickly achieve the growth the MSP wants over the next several years.
"We recognised that to get the next level you need critical mass and we just can't get there the next 10 years doing it the way we were doing it. With Konica Minolta, there's a huge SMB client base and we think we can work very well to find synergistic solutions for all our customers," Croteau said.
"We were not aware of anyone with the scale of Konica Minolta in this space. We're excited to have all these resources behind us."
Konica Minolta has a vision of a broad slew of services not just managed IT or print services but also into vertical markets, Croteau said.
On Thursday, Croteau echoed MindShift CEO Paul Chisholm's sentiments that the MSP market is so fragmented and the business model so unique that it is difficult to achieve scale organically.
All Covered has completed 16 acquisitions itself over the last three years, Croteau said. Last year, the MSP hired an investment banker to help find a buyer, said Taylor. The firm identified 57 prospects, which was then whittled down to three finalists, Taylor said.
Next: All Covered Brand Will Be Retained
"We hadn't realised they were in play until they were pretty far along. We came in late, but that didn't stop us," Taylor said.
One of the things that Croteau found attractive about Konica Minolta was its insistence on meeting face to face and not just by a Webex meeting, he said.
Konica Minolta will keep the All Covered brand and each company will sell its own respective services, but both will be cross-trained to sell managed print or managed IT as part of a more complete portfolio, executives said.
Konica Minolta will continue to deliver managed print and All Covered will deliver managed IT, but the customer would get one bill, executives said.
"We have managed print today and it's a natural progression for those customers to request [managed IT services]. The turnkey approach is a one-stop shop for all these integrated services to help the flow of information," said Sam Errigo, senior vice president of business intelligence services at Konica Minolta Business Solutions.
Added Taylor, "We're not going to hide the relationship between All Covered and Konica Minolta. Customers will be able to get from either an agreement to cover all services. We'll make it simple for the customers. We'll figure out how to allocate the revenue on our own.
"If you want managed print and managed IT, we'll be able to deliver a seamless solution to cover all areas of your agreement with us. The idea is to simplify customers' lives not add complexity. That seems to be what customers are asking for."