Presidio Sells Refurbished Hardware Reseller Subsidiary To Private Equity Firm

Presidio, one of Cisco's largest solution providers, is selling its refurbished hardware reselling subsidiary Atlantix Global Systems to a group led by highly regarded private equity firm Millstein & Co.

"Atlantix’s business is not core to Presidio and I believe the MIllstein group can take them to the next level," said Presidio CEO Bob Cagnazzi in a prepared statement.

Atlantix - No. 155 on CRN's SP500 list with an estimated $130 million in annual sales - sells refurbished systems and reconfigured systems and telecom equipment from the likes of Dell, Cisco, HP, IBM and Sun Microsystems. Atlantix has also added storage solutions to its repertoire and seen an expansion of its asset recovery business that was large enough for it to open a 68,000-square-foot refurbishing and distribution center in 2014 to accommodate that growth.

[Related: CRN's Mergers and Acquisitions News Page]

Presidio, , No. 21 on CRN's Solution Provider 500 list , on the other hand, has turned its focus toward the managed services part of its business, launching offerings for networks, collaboration, data centers, IT security and workspace services, as well as solutions for services management. As the company moves toward managed service offerings that create predictable recurring revenue streams, Presidio has moved away from the refresh-centric business cycle of traditional hardware resellers like Atlantix.

Terms of the deal were not disclosed.

"This was largely empty calories for Presidio which is focused on the cloud," said Martin Wolf, president of Martin Wolf M&A Advisors, Walnut Creek, Calif., one of the top channel investment advisory deal-makers."Millstein can build this up as a scale opportunity in a fragmented market. It's a smart move for both companies."

The deal is part of a huge wave of private equity investment in the channel in 2015. "This is the most active year ever for private equity channel investments," said Wolf. "They are attracted by the generally consistent cash flows and growth."

New York-based Presidio took over Atlantix in March 2007 as part of its acquisition of Solarcom. Following that deal, Presidio added the Solarcom solution provider business to its subsidiary, Presidio Network Solutions, and created two other subsidiaries from the acquisition: its refurbished hardware reselling division, Atlantix and its financing and leasing arm, Solarcom Capital.

Millstein & Co. is no stranger to the solution provider market. The private equity company bought DLT Solutions –No. 35 in the CRN SP500 - in January, placing one of Millstein’s partners at the head of the company.

Presidio and Millstein could not be reached for additional comment.

PUBLISHED OCT. 23, 2015