General Informatics Acquires Fellow MSPs CMS, Unicom

‘Our focus in acquisitions is not just on financially stable and profitable companies, but on those who have plans for organic growth. We’re not looking for companies that have grown as far as they can. We want those who are looking for opportunities elsewhere,’ says Donald Monistere, CEO and president of General Informatics.

General Informatics is continuing its MSP acquisition spree with the purchase of CMS IP Technologies.

As part of the deal, General Informatics gets a significant expansion into Texas and Colorado, following its earlier acquisition of Unicom, said Donald Monistere, CEO and president of Baton Rouge, La.-based General Informatics.

CMS IP Technologies is an incredibly profitable traditional managed service provider which two years ago was carved out of USConnect as a way to expand its MSP business, Monistere told CRN. USConnect in November was acquired by ITC Broadband Holdings, also known by its “Highline” brand name, which then decided to sell CMS, he said.

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While the Unicom acquisition brought General Informatics a managed services presence in Houston and Austin, Texas, along with an engineering team in Waco, Texas, CMS IP Technologies gives the MSP new Texas locations in Beaumont, Lufkin, and Livingston, as well as in Pueblo, Colo., he said.

“We felt this was a good way to expand in Texas, and let the two leverage each other,” he said. “We will integrate them together first before moving to integration our other acquisitions.”

General Informatics is looking to expand its presence in tier-two markets by acquiring MSPs which have done well in those markets, Monistere said.

“We’ve been acquiring companies with incredible brand awareness,” he said. “People recognize the Unicom and CMS names in those smaller markets. So we’re in no hurry to rebrand. There’s no ego. We’re going to follow the pace of our customers. Once they know who we are, we’ll be ready to make changes.”

General Informatics, which in November acquired Versiant, and in May acquired Emco Technologies‘ PC sales and managed services division, was itself acquired in late 2020 by Rosewood Private Investments, a private equity company which is using General Informatics as a platform for building a managed services business, Monistere said.

General Informatics will continue to make acquisitions, and currently has two more “in the hopper,” Monistere said. He said he could see future MSP M&A activity by his company in the Lake Charles and Lafayette, La. areas given that the company already is on the I-10 corridor with locations in Baton Rouge, La. and Beaumont, Texas.

“And we’ll likely do tuck-in acquisitions to expand our existing territories in Florida, Georgia, and Alabama,” he said.

Growth prospects are a key part of the decision about which MSPs to acquire, Monistere said.

“Our focus in acquisitions is not just on financially stable and profitable companies, but on those who have plans for organic growth,” he said. “We’re not looking for companies that have grown as far as they can. We want those who are looking for opportunities elsewhere.”

General Informatics learned about CMS IP Technologies via Focus Investment Banking, a Vienna, Va.-based middle-market investment bank providing sell-side and buy-side services, Monistere said.

Abe Garver, MSP team leader and managing director at Focus Investment Banking, told CRN his company helped General Informatics bring in Rosewood as an investor, and then worked with the MSP to help identify CMS, Unicom, and two other MSPs who have already signed letters of intention with General Informatics.

Focus also helped Versiant when that company was acquired by General Informatics, Garver said.

For a company like General Informatics, Focus Investment Banking’s MSP team maintains a master target list of 2,800 MSPs with between 10 and 1,000 employees, Garver said. It reaches out to potential MSP M&A targets in a 10-state area to introduce the acquiring company and its successes. Focus eventually brings together General Informatics, the potential acquisition, and Rosewood to meet, he said.

“Both the private equity group and Don [Monistere] will show up to do the first call,” he said. “We then get the NDA (non-disclosure agreement), and have a fireside chat with the companies, gather data, and get to an IoI (indication of interest). We want to work with management teams who have the passion to work together. We then move to the LoI (letter of intent), and 60 to 70 days later announce the deal.”

Garver said his organization also works with other MSPs including The Purple Guys, which just recently acquired fellow MSP Technology Pointe.