Triple Threat: Private Equity Deal Paves Way For $1.3B Tech Powerhouse

‘Why in the hell are we not coming together?’ We collectively sold it to Court Square and said, this is what we think is right for our customers. This is what’s right for our vendors,’ Stephen Ayoub, founder and CEO of Data Blue, -- who will now step into the roll of president and chief revenue officer for the soon-to-be created company -- tells CRN.

A three-way deal between solution providers in Chicago and Atlanta will combine two of Court Square Capital Partner’s companies and acquire a third to create a $1.3 billion solutions juggernaut.

The mega deal merges AHEAD – which is No. 75 on the 2019 CRN Solution Provider 500 -- with Data Blue, No. 96 on the same list. Both of those companies are owned by Court Square, which is also acquiring Atlanta-based Sovereign Systems, which comes in at No. 185 on the CRN Solution Provider 500.

Financial terms of the deal were not disclosed.

Data Blue founder and CEO Stephen Ayoub, who will now step into the roll of president and chief revenue officer for the soon-to-be created company, told CRN that wasn’t always the plan.

“Court Square wanted to keep us as two separate assets in the portfolio,” he said. “I approached (Daniel Adamany founder and CEO of AHEAD) and said, ‘This is ridiculous. It makes sense for us to come together. We’re going to compete in the market. We’re going to compete for the same acquisitions. You have a great platform. We have a great platform. We have no overlap in geography. Why in the hell are we not coming together?’ We collectively sold it to Court Square and said, this is what we think is right for our customers. This is what’s right for our vendors.”

Martin Wolf, president of martinwolf M&A Advisors of Walnut Creek, Calif., one of the top channel investment advisory deal-makers, called the newly formed company a “formidable presence” in the channel landscape.

“What makes this interesting is Sovereign Systems is an excellent regional solution provider. Excellent. High end. High value,” Wolf said. “AHEAD is one of the preeminent privately held solution providers in the country. You put the three together and you have a formidable presence.”

In a statement, AHEAD said the deal is expected to close in 60 days. Each company will retain its name until a new brand is created, the statement said. Each one of the three companies has a strong Dell practice, which Ayoub said grew out of their EMC business. AHEAD won the DellEMC Extraordinary Partner of the Year award in 2018. Data Blue is a Titanium partner with DellEMC. In 2019, Sovereign Systems was awarded for Channel Services Delivery Excellence in the Dell Technologies Partner Program.

“We will be Dell’s largest data center partner,” Ayoub said. “Now the asterisks on that is, worldwide, once a year, once a quarter Dell does a large deal at JP Morgan Chase, or Citi, for like $100 million. So there are going to be instances where any one partner, could do a really large deal for the quarter, but we would consider ourselves as far as in the solution provider space, in the data center, we’d be the largest.”

Wolf said that could cut both ways for Dell.

“This is both good and bad for Dell,” Wolf said. “It’s good for Dell, they have a more professional, larger organization to support services and products. That’s a good thing for Dell. The bad thing for Dell is that they have a little big more leverage in the relationship. It makes everybody better.”

Adamany will serve as CEO of the new company. The firm will be headquartered in Chicago with continued investment in Data Blue’s hubs in Atlanta and Nashville, along with other sales and services offices across the Midwest and east coast, the company said in a statement.

“We’re thrilled to join forces with Data Blue and Sovereign Systems,” Adamany said in a statement. “Together we’ll harness tremendous synergies between our offerings, our partners, and the markets we serve - all to the enormous benefit of clients.”

Founded in 2007, AHEAD was acquired by New York-based Court Square Capital Partners in 2015 for undisclosed terms. Court Square has been a major player in the IT market, acquiring a number of solution providers.

In 2007, Court Square bought CompuCom, which is now owned by Office Depot. In 2011, it bought unified communications systems integrator Strategic Products and Services (SPS), which it then sold in 2017 to ConvergeOne. In May of this year AHEAD bought Link Solutions Group,

In a statement, the company said assets from AHEAD will bring consulting and implementation expertise in areas of enterprise service management, DevOps, monitoring and analytics, and security; while Data Blue adds managed services and deep networking expertise. The acquisition of Sovereign Systems will rope in cloud, VMware, and ServiceNow expertise into Data Blue’s client-facing operations.

A 300-employee company, Chicago-based AHEAD has 10 offices centered in the Midwest, and was founded in 2007. The company is a premier consulting partner for AWS, with more than 70 specialists. It also holds a Gold Cloud Platform Competency with Azure and has 30 Azure specialists.

In addition to Dell, AHEAD partners with Nutanix. It also earned the Cisco Advanced Security Architecture Specialization in 2017, and it has formed a practice supporting Cisco’s AppDynamics platform. Earlier this year, AHEAD was awarded VMware partner of the year in the category of professional services.

Headquartered in Atlanta, Data Blue bills itself as a value-added reseller focusing on delivering “storage, backup and server virtualization and consolidation solutions to the enterprise, with specific emphasis on Fortune 1000 companies.”

Data Blue is a gold-certified partner with Microsoft, and it is a gold-level partner with Cisco. The company also has partnerships with AWS, CenturyLink, Citrix, VMWare, Oracle,SAP, Symantec and Palo Alto, among others.

Sovereign Systems won the global 2018 VMware Partner Innovation Award in Cloud Management and Automation Services.