Blue Mantis Shifting Into ‘High Growth Mode’ With New Private Equity Majority Owner

‘We are super excited to scale and become a North America superpower,’ says Blue Mantis CEO Josh Dinneen, who is already in discussions with three potential acquisition targets.

Blue Mantis is stepping up its fast growth security-first, next-generation technology service provider sales offensive under a new private equity majority owner, Recognize.

The New York-headquartered Recognize, which focuses solely on technology services companies and has a portfolio of just nine companies, expects to build on the Blue Mantis foundation with near and longer-term acquisitions.

Abry Partners, headquartered in Boston, the former majority owner which took the ownership stake in Blue Mantis in December 2020, will stay on as a minority investor. Financial terms of the deal were not disclosed.

“All in all, I couldn't be happier as we get to really shift gears now into high growth mode,” said Blue Mantis CEO Josh Dinneen, who engineered the new private equity deal to fuel geographic expansion and additional acquisitions. “But I want to be very clear: we are going to grow under control and with a purpose. We are not going to just do a roll-up strategy. This isn’t M&A-led. It is a combination of organic and inorganic growth that is going to drive performance.”

Blue Mantis, which formally announced the deal on Monday, will be “more aggressive” with acquisitions with a focus on investing in the right geographies and technology segments to fuel sales growth, said Dinneen (pictured above). “We are super excited to scale and become a North America superpower,” he said.

Dinneen is already in discussions with three potential acquisition targets. “It’s a competitive market,” he said. “I think the opportunities are heating up.”

Among the areas that the next-generation midmarket and enterprise-focused services provider is looking at for potential acquisition targets are data enablement, data management, cybersecurity, and territory expansion, said Dinneen. “We are looking for companies that can help accelerate growth with adjacencies and capabilities that really make sense for us,” he said.

The new majority ownership stake comes with Blue Mantis, headquartered in Portsmouth, New Hampshire, on a services-fueled sales tear.

Over the last three years, Blue Mantis has delivered a compound annual growth rate of 26.5 percent with revenue soaring to more than $250 million with 50 percent recurring revenue. At the same time, the company’s workforce has grown from just 150 three years ago to 400.

That 400-person team has been the driving force behind the company’s success, said Dinneen. “We are an IT services company so our people are our product and our culture drives that,” he said. “They believe in the mission. They're committed.”

Among the services capabilities that sets Blue Mantis apart from competitors, said Dinneen, is its on-shore and off-shore models, supporting its managed services business with a global delivery center in Bangalore, India and Toronto.

The company’s highly regarded cybersecurity practice, the fastest growing part of its business, is delivering triple-digit sales growth, said Dinneen. Blue Mantis is also seeing robust cloud services growth, he said.

“We have really been firing on all cylinders,” he said. “We launched a new practice this year, resource management as a service (sourcing IT talent for customers), which has really taken off.”

The services focus is being supplemented by a strong reseller business that is growing, said Dinneen. “The hardware business has been actually a pleasant surprise for us this year,” he said.

Dinneen credited Abry – which made an additional investment as part of the deal- with providing “amazing” support, leadership and capabilities to help drive Blue Mantis forward. “Abry is still very bullish on us,” he said. “They didn’t roll forward. They separately invested forward in our company. Abry set a high bar for Recognize. I think the partnership between Recognize and Abry to help us drive success in the market is going to be a great coming together of three amazing organizations.”

Dinneen said he and Blue Mantis team couldn’t be more excited about partnering with Recognize, which brings deep knowledge of the technology services business with co-founders that have built world class technology services companies.

“We are very excited about what they bring to bear,” he said. “They really understand services delivery. They have done it. They’ve scaled (services) businesses, overcome hurdles and broken glass ceilings. We’re going to learn a lot from them.”

The four Recognize co-founders are: Frank D’Souza, co-founder and former CEO of Cognizant Technology Solutions, No. 8 on the 2024 CRN SP500; Rajeev Mehta, former president of Cognizant Technology Solutions; Charles Phillips, former chairman and CEO of ERP software maker Infor; and David Wasserman, former partner at private equity powerhouse Clayton Dubilier & Rice.

Dinneen said the “buzz and energy” from the Blue Mantis team about the change in ownership has been exhilarating. “The energy has been tremendous,” he said. “Everyone is excited. When you are PE-owned and you are driving growth and you have the success we’ve had the natural concern that pops into your head is: are we going to get gobbled up by somebody. Everybody knows now that is not the case.”

In fact, Blue Mantis is the foundation to build a new next-generation technology services behemoth, said Dinneen. “We are the platform and we are excited to keep growing,” he said. “That is putting a lot of excitement and buzz in the air with our team. People here are confident we are investing in them. It’s a once in-a-lifetime opportunity. The opportunities that this team is going to have as we grow and scale are going to be tremendous. Our folks are going to take good advantage of that as they drive their careers and they learn how to win and how to fail quick, and all the things that come with growth, as an individual and as a company.”