CBTS CEO On Acquisition By TowerBrook: ‘It’s An Opportunity To Build Something’

‘A major focus for us is AI. Over the past 10 months, AI has gone from a buzzword to a true market disrupter, and we’ve built a strategy around enabling our customers to consume AI technologies,’ says Jeff Lackey, president and CEO of CBTS.

In a major move signaling both strategic growth and focus, CBTS has spun out from its previous telecommunications parent company, Altafiber, and has been acquired by London-based private equity firm TowerBrook. This shift marks a new phase for CBTS, No. 43 on CRN’s 2024 Solution Provider 500 list, as it looks to capitalize on new opportunities in AI.

“The partnership with TowerBrook was exciting because they could make us their primary focus,” Jeff Lackey, president and CEO of CBTS, told CRN. “With their capital and commitment, we can pursue M&A activity and accelerate growth especially as AI starts to transform our industry. It’s an opportunity to build something that we believe has significant potential.”

Terms of the deal were not disclosed.

With the acquisition finalized last week, Cincinnati-based CBTS also unveiled a newly appointed board of directors. The board includes prominent industry leaders with extensive experience in technology and IT services, bringing valuable expertise to guide the company’s continued growth.

The new board chair, Abidali Neemuchwala, has more than 32 years of leadership experience in the global IT sector and is known for his role as CEO of Wipro. Joining him are Rick Snyder, former senior vice president at Cisco Systems, and Jerry Leamon, former global managing partner at Deloitte.

“CBTS has built a longstanding brand as a trusted technology adviser and service provider to its customers over many years,” Walter Weil, managing director of TowerBrook, told CRN in an emailed statement. “We are thrilled about the successful closing of the CBTS acquisition and look forward to partnering with CBTS’s deeply experienced employee base and investing in its service offerings to address growing needs around digital transformation, data analytics and AI while continuing to be laser-focused on providing the best customer experience possible.”

CRN spoke to Lackey about the acquisition, how this further enhances innovation in AI and IT services, and what this means for the company’s customers going forward.

What was the strategy behind spinning out from Altafiber and being acquired by TowerBrook?

The strategy was really twofold. First, we were a healthy, growing business that had a lot of success as part of Altafiber. But the long-lived asset investment thesis that Altafiber had didn’t quite align with our business model. They were more focused on infrastructure like fiber networks, while we are a service-oriented business, helping customers with IT services. As a result, Altafiber decided it was best to separate us out. This allowed us the freedom to take our business to the market in a more focused way.

The partnership with TowerBrook was exciting because they could make us their primary focus. With their capital and commitment, we can pursue M&A activity and accelerate growth, especially as AI starts to transform our industry. It’s an opportunity to build something that we believe has significant potential.

How does the acquisition by TowerBrook align with your strategic goals for the next year, particularly in terms of AI and M&A?

TowerBrook’s investment will directly support our strategic initiatives. They bring a lot of expertise in investment strategy, and we’ve developed a shared vision of where we can take the company. A major focus for us is AI. Over the past 10 months, AI has gone from a buzzword to a true market disrupter, and we’ve built a strategy around enabling our customers to consume AI technologies.

That said, the funding we’re receiving will also be used to bolster our capabilities in key areas like public cloud, security and digital transformation. We plan to grow both organically and through acquisitions whether that’s expanding into new geographies or buying companies with complementary technology stacks. This will allow us to continue providing value to our large enterprise customers.

With this new capital, do you plan to bring on new employees?

Yes, we’re definitely going to be expanding our workforce. The demand for technical talent is evolving. A decade ago, skills like Microsoft Exchange were in high demand, but now the biggest need is for software engineers who understand cloud environments and can help with digital transformation. We’re constantly evaluating the profile of our employees to ensure we have the right skills to meet customer demands.

While we’re always looking to bring in new talent, we also see the value in the gig economy. Many highly skilled engineers and consultants prefer the flexibility of contract work, so we leverage a combination of full-time employees and subcontractors. As we scale, we expect to grow our workforce by 10 [percent] to 20 percent, but a lot of that will depend on the acquisitions we make and the specific needs of the business.

What is your M&A strategy going into 2025?

We see M&A in two key areas—capabilities and geography. Our first priority is to acquire capabilities that strengthen our existing offerings, like deepening our expertise in Microsoft technologies or enhancing our security capabilities. If we can find a company that already has the talent and customer profile we need, that’s a great opportunity.

The second area is geographic expansion. We don’t currently have a strong presence west of the Mississippi, so we might look for acquisitions in regions like California or Nevada.

In total, we’re looking at two to three acquisitions over the next couple of years with a mix of capability-driven acquisitions and those focused on geographic expansion. It’s not just about growth for the sake of growth—we want to ensure these acquisitions align with our customer needs and long-term goals.

How will being under TowerBrook’s umbrella benefit your employees and clients?

The biggest change for our employees is that they now have the opportunity to be part of a business that’s entirely focused on its success. TowerBrook’s exclusive focus on CBTS means we’re going to see more investment, more growth and more opportunities for our people to advance professionally. This growth will create new career pathways and challenges for employees at all levels. For our clients, the biggest benefit is that we’ll have more flexibility and resources to meet their needs. We’ll be able to act more quickly, make smarter investments and expand our offerings in a way that drives more value for them.

With the new leadership, how do you plan to leverage the board’s expertise to guide the company’s next phase?

The new board members bring a wealth of experience in IT services, consulting and technology. They come from diverse backgrounds and have experience in companies that operate very differently from ours. Having access to their knowledge and fresh perspectives has already helped shape our strategy. Some of their ideas have been incredibly complementary to our approach, while others have challenged us to think in new ways.

Their guidance is helping us refine our growth strategy, particularly when it comes to executing M&A and scaling our business. We know what we’re good at, but having this broader range of expertise helps ensure we’re making the right decisions.

What impact will this acquisition have on CBTS’s existing customers?

For our customers, the acquisition won’t change the day-to-day relationship they have with us. They’ll still receive the same level of service, and we’re committed to maintaining the quality and reliability that we’re known for. What will change is our ability to deliver even more value. We’ll be able to grow more quickly, expand our offerings and be more agile in responding to their needs. If they ask for something, we won’t just have to say, ‘Maybe later.’ We’ll be able to say, ‘Yes, and here’s when we can deliver it.’