Platform MSP Coretelligent Buys Pennsylvania Firm In Mid-Atlantic Play

‘We certainly had to work hard. There’s no shortage of competition in the MSP space, but between our leadership team and our terrific investors, we succeeded. And we approached the acquisition like we always do by being open and honest and talking through the positives of a potential acquisition, and also some of the risk areas,’ says Kevin Routhier, Coretelligent founder, president, and CEO.

Managed service provider Coretelligent this week said it has acquired fellow MSP Advanced Network Products in a move to expand its reach to the mid-Atlantic area while picking up a solid talent and customer base.

Needham, Mass.-based Coretelligent is a platform MSP, which is an MSP backed by private equity aimed at combining multiple smaller companies into a managed service provider with a wide reach.

Kevin Routhier, Coretelligent founder, president, and CEO, said his company is a comprehensive security and cloud architecture organization that focuses heavily on AI and end-to-end services covering the full gamut of support, compliance, security, managed services, and AI-enabled digital transformation services.

[Related: MSPs And Private Equity: What Makes An MSP Stand Out From The Pack?]

Its primary vertical focus is in the financial services and life sciences, including healthcare, markets, Routhier told CRN.

Plymouth Meeting, Pa.-based Advanced Network Products, or ANP, offers a complementary vertical focus, and brings Coretelligent an enhance presence in the mid-Atlantic geography, he said.

“The name Advanced Network Products, by the way, is a little misleading because they are a full service organization,” he said. “They’re not just out there reselling network equipment. But we all know that a name takes on many different forms for many different reasons.”

Coretelligent was founded in 2006, and in 2016 took on its first private equity with a partnership with New York-based Veronis Suhler Stevenson, or VSS, Routhier said. With that investment, it tripled in size through 2021 when another private equity firm, Minneapolis-based Norwest Equity Partners, took over as primary investor.

“So we’ve been partnered with them for the last 18 months,” he said. “And we’ve had a very successful partnership VSS remains invested, and my family and I are still very heavily invested in the business.”

Coretelligent, which is listed in CRN’s 2023 Managed Service Provider 500, employs nearly 500 people, with multiple offices in the U.S. and overseas. ANP is Coretelligent’s seventh acquisition.

Coretelligent has a list of 10 to 15 requirements it looks at in a potential acquisition, and ANP hit nearly every one of them, Routhier said.

ANP has been around for over 30 years, and has done an outstanding job with net revenue retention and gross client retention, he said. Geographically, ANP was also a great fit, he said.

“We view the mid-Atlantic and the tri-state area as a continued great investment opportunity for Coretelligent as we continue our roll up strategy here across the domestic U.S.,” he said.

ANP’s revenue profile and level of profitability in similar verticals to those of Coretelligent stood out, Routhier said.

“We just felt that pound for pound, they were one of the strongest MSPs available today,” he said. “Actually, I shouldn’t say available. They weren’t available. But because of the trust that we were able to forge with the Mulvey family, who previously owned ANP, we were able to build a solid relationship showcasing how like our two companies were not only in the shared services and technology stack and all the things that will make for a smooth integration, but most importantly, how they care about their clients, and how they care about their team members, and how they treat their clients and their team members.”

Coretelligent first learned that ANP was a potential acquisition target from Washington, D.C.-based Focus Investment Banking, which was helping ANP explore a sale, Routhier said.

“[Focus] made a proactive introduction while getting ready to bring ANP to market,” he said. “And we’re certainly glad they did. They felt that Coretelligent, along with many others, would be a strong suitor for ANP. But I’ll say that when we got connected, there was a very natural camaraderie between the two teams. It was an excellent character fit from both sides.”

It was also a competitive process, Routhier said.

“We certainly had to work hard,” he said. “There’s no shortage of competition in the MSP space, but between our leadership team and our terrific investors, we succeeded. And we approached the acquisition like we always do by being open and honest and talking through the positives of a potential acquisition, and also some of the risk areas.”

Routhier said there were dozens of potential suitors looking at ANP.

“We’ve done a few deals with Focus, so we are trustworthy as a buyer,” he said. “We do what we say we will do, and that gives them great confidence in recommending a potential partnership with a firm like Coretelligent. But they ran a very tight and tough process, to the benefit of their client, ANP. But we feel that we paid a market prevailing price and got a tremendous asset as a result.”

Routhier declined to discuss the financial terms of the deal.

Routhier said to expect more acquisitions going forward, and that acquisitions in the MSP space are getting harder.

“There’s a lot of buyers,” he said. “There are some buyers that aren’t platforms. There are some that are platform MSPs like Coretelligent. And that creates a unique competitive situation, because you’re not only vying against your MSP brethren. You’re also competing against potential sponsors in the private equity space. And so striking the right value proposition, striking the right level of trust, and really being able to back that up with an agile, transparent process is so important to the success story of an acquisition strategy.”