Computer Task Group Still Coy On Assurance Services Group's Bid To Acquire CTG

Assurance Services Group has been chasing Computer Task Group for nearly a year, raising its bid but still not finding the magic number that would satisfy CTG. This is only the latest in a string of private equity companies looking to acquire solution providers.

Private equity interest in the channel continues in 2019 as Computer Task Group is continuing to act coy around acquisition interest from private equity firm Assurance Services Group, but is not shutting the door entirely.

Buffalo, N.Y.-based Computer Task Group, or CTG, on Tuesday said it has received a new unsolicited bid from Assurance Global Services, a Greenwich, Conn.-based private equity firm, but is declining to take action on the offer.

However, the company said its board of directors and senior management team have had multiple meetings with Assurance Global Services over the last few months to better understand the private equity company's viewpoints.

[Related: Channel Cash Blitz: Private Equity Dollars Go MSP Hunting in 2020]

Computer Task Group, ranked no. 72 on CRN's 2019 Solution Provider 500 list, said it advised its shareholders to take no action based on ASG's proposal to acquire CTG for $7.00 per share cash. CTG's shares on Wednesday rose 6 cents per share to $6.17.

At that offered price, CTG would be valued at about $102.9 million, compared to the company's market capitalization as of Wednesday of $90.7 million.

Computer Task Group declined to respond to a CRN inquiry for more information.

This is not the first time ASG has approached CTG about a possible acquisition. ASG in May and July sent unsolicited proposals to acquire CTG for not more than $6.00 per share in cash, to which CTG Chairman Dan Sullivan on July 23 responded in a letter that the "proposal does not constitute a basis for engaging in further dialog."

The move by Assurance is only the latest in a string of solution provider acquisitions by private equity companies.

Just this month, Rockville, Md.-based solution provider Dataprise was acquired by Trinity Hunt Partners, a Dallas-based private equity company.

In September, Chicago-based Ahead and Atlanta-based Blue Data, both of which are owned by New York-based Court Square Capital Partners, were combined into one, and than acquired Atlanta-based Sovereign Systems, creating a $1.3-billion solution provider.

Grapevine, Texas-based Buchanan Technologies in August was acquired by Lightview Capital, a Summit, N.J.-based private equity company.

an Antonio, Texas-based Sirius Computer Solutions in April was acquired by Clayton, Dublier, & Rice, a New York-based global private equity manager.