The Deal
Trinity Hunt Partners-backed Dataprise announced its acquisition of PEI, a Colorado-based managed IT services provider, on October 31, 2023. The transaction marks Dataprise's entry into the Colorado market as part of its broader strategy to build a nationwide managed services platform through strategic acquisitions.
PEI operates as a regional MSP serving businesses across Colorado with managed IT services, technology solutions, and infrastructure support. The company has established relationships with local businesses seeking to optimize their IT operations and infrastructure. Dataprise, headquartered in the Mid-Atlantic region, has been actively expanding its geographic footprint under Trinity Hunt Partners' ownership since the private equity firm's investment.
Financial terms of the transaction were not disclosed. The deal represents another step in Dataprise's acquisition strategy, which focuses on adding complementary service capabilities and expanding into new regional markets across the United States.
Strategic Logic
This acquisition provides Dataprise with immediate market presence in Colorado, a growing technology hub with significant demand for managed IT services. The Denver-Boulder metropolitan area in particular has seen substantial business growth, creating opportunities for MSPs serving mid-market companies requiring sophisticated IT support.
The geographic expansion aligns with Trinity Hunt Partners' strategy of building a national platform through targeted regional acquisitions. Key strategic benefits include:
- Market Entry: Establishes Dataprise presence in the Mountain West region
- Client Base Expansion: Adds PEI's existing customer relationships and local market knowledge
- Service Delivery Scale: Leverages Dataprise's broader platform capabilities to serve Colorado clients
- Cross-Selling Opportunities: Introduces PEI clients to Dataprise's expanded service portfolio
The deal follows the typical PE platform playbook of acquiring regional MSPs with established client bases and integrating them into a larger service delivery model. Colorado's business-friendly environment and growing technology sector make it an attractive market for managed services expansion.
Valuation Context
While deal terms remain undisclosed, this transaction occurs during a period of continued consolidation in the MSP sector. Regional MSPs with established client bases and recurring revenue streams continue to attract premium valuations from both strategic buyers and PE-backed platforms.
The MSP M&A market has shown resilience despite broader economic uncertainty, with buyers particularly focused on providers serving stable business markets. Colorado-based MSPs benefit from the state's diverse economy and growing technology sector, factors that typically support higher valuation multiples.
Trinity Hunt Partners' continued investment in Dataprise acquisitions suggests confidence in the managed services consolidation thesis. PE-backed platforms like Dataprise often pay competitive multiples for regional providers that offer clear strategic value, particularly those expanding geographic reach into attractive markets.
What MSP Owners Should Know
1. Geographic Expansion Drives Premium Valuations PE-backed platforms actively seek MSPs in new geographic markets, often paying higher multiples for providers that offer clear market entry opportunities. MSPs in growing business markets like Colorado benefit from this strategic premium.
2. Regional Market Knowledge Commands Value PEI's local market presence and client relationships represent significant value beyond financial metrics. Buyers recognize that established regional providers offer market intelligence and client trust that cannot be easily replicated.
3. Platform Integration Capabilities Matter Successful exits to PE platforms require MSPs that can integrate smoothly with larger service delivery models. Providers with standardized processes and scalable operations are more attractive acquisition targets.
4. Consolidation Activity Remains Strong Despite economic headwinds, PE-backed platforms continue executing acquisition strategies in the MSP sector. Well-positioned regional providers should expect continued buyer interest, particularly from platforms seeking geographic expansion.