From The Editor | December 28, 2017

Why ITS Was A Great Acquisition For ATS

Matt Pillar

By Matt Pillar, chief editor


Last fall, David Corey, VP of IT Services at Advanced Technology Services, Inc. (ATS), wrote this Channel Executive guest editorial for us. In the column, he proffered a few digital transformation fundamentals for MSPs and IT service providers in general. These words, in particular, offered a bit of foreshadowing in light of recent news from ATS.

“Perhaps most importantly to MSPs and all those who provide value-added services, there is the need for a huge increase in agility. Networks, applications, business models, workflows, and other aspects of commercial activity must all be more flexible and scalable. Service providers must be able to respond to both expected and unexpected changes in direction and scope,” Corey suggested. “Achieving this, however, will require a hyper-awareness of market shifts in technology. Developments in hardware, software, and networks are happening at an increased rate, and providers must be astute and up-to-date regarding the latest trends. (One caveat: Don’t just follow the darlings of the transformation process. Despite the high-flyers — some of whom have been created by the media — the most important agents of change often fly under the radar. Every industry has them, and it is wise to find and track them.)”

Apparently, ATS had been tracking at least one such agent of change in New Jersey-based ITS (Innovative Technology Solutions), which it just acquired. I caught up with Corey just before Christmas to discuss the strategy behind the acquisition. “For managed IT service providers, the digital transformation opportunity is in large part about the IT strategy and the infrastructural blocking and tackling to execute on the strategy, which frees up the client to focus on business,” he said. “ITS does that strategy consultation and blocking and tackling today. They have a seat at the digital transformation table with their customer base, which we can learn from.”

Inside ATS’ New Acquisition Strategy

The ITS deal is the first of what Corey anticipates will be a series of strategic acquisitions by ATS. He said it was important to find a great match. “Our growth over the past 32 years has been organic. We’ve identified that acquisitions will be necessary to continue the growth trajectory we desire,” says Corey. “There are a lot of folks watching this one very closely, so we weren’t looking for a ‘fixer-upper’ and it was important that we hit it out of the park.”

ITS was a good choice, he says, because of its similarities to ATS. Its product set, service desk, and culture are aligned, which would ease integration efforts. Corey says associate and customer retention and solution set integration are the company’s primary short-term post-acquisition goals.

Once the dust settles, he says ATS will look for some substantial opportunities to arise from the acquisition. Specifically, ITS’ customer base is a target-rich environment for ATS, because in addition to traditional managed services, ATS has a long history selling factory MRO (maintenance, repair, and operations) solutions. Much of ITS’ MSP services customer base is in the manufacturing space, which opens up a host of cross-sell and upsell opportunities for ATS.

“We visited with several of ITS’ largest customers as part of our due diligence,” says Corey.  “We found broad acceptance and satisfaction with ITS’ service, and considerable excitement about our MRO offerings and global capabilities.” Strategically, this looks like an all-around good deal. As the new year progresses, we’ll revisit this partnership and offer up some learnings from the first of ATS’ significant acquisitions.