Private Equity Goliath GTCR Buys Fast-Growth Phenom Park Place

GTCR plans to purchase a third-party maintenance (TPM) superstar to further accelerate its geographic footprint and service offerings through organic growth and acquisition.

Cleveland-based Park Place Technologies - No. 270 on CRN's Solution Provider 500 - said its acquisition by the Chicago-based private equity powerhouse will enable Park Place to ride the cloud adoption wave. Park Place has been owned since 2012 by WestView Capital Partners, a private equity firm with extensive experience in the managed services space.

"GTCR brings significant resources and experience in building industry-leading companies, and I believe they will be a valuable resource in the long-term expansion of our business," Ed Kenty, Park Place CEO, said in a statement.

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Terms of the deal, which is expected to close in December, were not disclosed. GTCR and Park Place didn't immediately respond to requests for additional comment.

Demand has grown around Park Place's post-warranty maintenance services for networking and data centers as companies look to shift more functions to the cloud, according to Martin Wolf, president of martinwolf M&A Advisors of Walnut Creek, Calif., one of the top channel investment advisory dealmakers.

"While OEMs [original equipment manufacturers] still provide the majority of post-warranty support, there is a growing market for alternatives that can provide more cost-effective solutions while extending the life of existing products," Wolf wrote in a transaction analysis.

Park Place was one of just 26 CRN Triple Crown Winners last year, meaning the company appeared in the SP 500, Fast Growth 150 and Tech Elite 250, which recognizes partners with the highest level of certifications from major vendors. Park Place appeared again this year on the SP 500 – moving up 39 spots from No. 309 last year – and the Fast Growth 150, climbing from No. 111 last year to No. 59 this year.

"The entire Park Place team has built a tremendous platform that is well-positioned for long-term success," David Donnini, GTCR managing director, said in a statement. GTCR said it plans to commit more money to fund future acquisitions and organic growth initiatives.

Park Place was founded in 1991 as a hardware reseller, and today has more than 330 employees supporting in excess of 5,000 customers across 70 countries. Park Place's customers range from small and mid-sized businesses to Fortune 500 organizations to government, higher education and health care institutions.

Park Place supports storage, server and networking equipment across vendors such as Brocade, Cisco, Dell, EMC, Hitachi, HP, IBM, Juniper, NetApp and Oracle. Companies with multi-vendor environments often turn to TPM companies such as Park Place thanks to their greater coverage flexibility, Wolf said.

The company also offers support services such as hardware relocation, upgrade, installation and disposal services. In addition to its Cleveland headquarters, Park Place has offices in Boston, Denver, Toronto, and London.

GTCR was founded in 1980 and has invested more than $12 billion in more than 200 growth companies across such verticals as financial services, health care, technology, media and telecommunications.

"The acquisition of Park Place is an excellent example of leveraging GTCR's investment experience in outsourced business services and deep domain expertise in internet and computing infrastructure," Larry Fey, GTCR principal, said in a statement.

GTCR's most recent acquisition came just last week, when subsidiary Zayo Group Holdings purchased Allstream Inc. from Manitoba Telecom Services.

TPM companies have been popular private equity acquisition targets in recent years, Wolf said, with Palmico Capital investing in Grand Rapids, Mich.-based Service Express, Inc., No. 426 on the CRN SP 500, in July, and Thomas H. Lee Partners buying Systems Maintenance Services back in 2010.

PUBLISHED NOV. 30, 2015