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Published in Small Business

Service Express acquires pair of firms as tech M&A market cools so far in 2022

BY Wednesday, July 06, 2022 04:42pm

GRAND RAPIDS — Third-party data center maintenance provider Service Express Inc. has acquired two companies: Middleville-based cloud hosting provider ​​iInTheCloud LLC and Danbury, Conn.-based managed service provider iTech Solutions Group LLC.

The deals expand Grand Rapids-based Service Express’ IBM offerings and IBM Gold Business Partner status to the U.S., mirroring its offerings in the U.K. Service Express expanded internationally with a string of acquisitions in 2021, including Blue Chip Customer Engineering Ltd. and The ICC Group. 

iInTheCloud works with Tier III data centers in West Michigan and specializes in hosting production, test, development or replicate environments to support disaster recovery.

“With Service Express’ headquarters only minutes from our data centers, the company has been the go-to service provider for many of our customers, as well as for iInTheCloud since its inception,” iInTheCloud co-President Larry Bolhuis said in a statement.

Meanwhile, iTech Solutions Group has more than 20 years of experience as an IBM Gold Business Partner and serves clients in the financial services, manufacturing and retail sectors. Service Express also adds iTech’s certified technical consultants, IBM i system administrators and other skilled technicians. iTech uses iInTheCloud’s infrastructure. 

The deal gives the company access to expand its service offerings and customer base. 

Service Express President and CEO Ron Alvesteffer said the deals “accelerate the expansion of our managed and infrastructure service offerings to the U.S.” 

“We anticipate strong company growth as we continue to broaden and diversify our solutions, bringing a wider portfolio of services to customers in the U.S. and U.K.,” Alvesteffer said in a statement.

Terms of the deals were not disclosed.

Since 2019, Service Express has been a portfolio company of Harvest Partners LP, a New York-based private equity firm.

The deals follow Service Express’s April acquisition of Trident Computer Resources, a New Jersey-based company that specializes in third-party maintenance, as MiBiz previously reported.

The acquisitions come amid a cooling market for tech M&A, according to a midyear analysis from PricewaterhouseCoopers LLP. First half deal volume fell 37 percent year-over-year, while deal values rose from $172.8 billion in 2021 to $272.4 billion this year. PwC attributed the spike in part to the number of megadeals in 2022, which accounted for 80 percent of the total value. 

The report’s authors also noted that private equity-backed firms like Service Express were “increasingly cautious” because of higher interest rates. 

Likewise, the drop in overall deal volume stemmed from “the increasingly uncertain geopolitical and macroeconomic outlook,” according to the report, which noted tech buyers continue to have “significant dry powder” and should get back into dealmaking as global markets stabilize.

“While macroeconomic uncertainties pose a threat to dealmaking in the near term, more realistic valuations and a tepid IPO market coupled with strong cash positions of tech buyers will lead a bounce back in M&A,” Sundar Ramamurthy, technology deal partner at PwC, said in a statement.

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