20 Jul Inacom acquired by Core BTS for strategic growth and founders exit strategy
MADISON – Inacom Information Systems (Inacom) based in Madison, Wisconsin announced Friday that Falls Church, Va. based Core BTS has acquired the 25 year-old information technology solutions provider. Both companies describe the deal as a merger orchestrated for strategic growth and enhanced customer offerings. The merger is also an exit strategy for Inacom’s co-founders Gary Hoffman and Laurie Benson, who retired from Inacom as well as founding investor Loren Mortenson.
Former CEO Benson will continue to pursue community interests on the regional and national level for which she has been well recognized. Benson was recently named the 2009 National Women in Business Champion winner by the U.S. Small Business Administration recognizing her for her efforts in helping women succeed in business.
The combined company will employ about 350 employees at 10 offices in six states in the Midwest and East Coast, according to Frank Albi, former President and COO of Inacom and current COO of Core BTS and President of Inacom.
“Core BTS provides us with a renewed business framework to support our three primary goals: providing continued excellence in the customer experience, preserving our corporate values and care for employees, and sustaining a clear focus to allow for continued healthy growth going forward,” Albi said.
“As a result of job duplication in purchasing and accounting functions, nine positions are being eliminated at Inacom,” Albi said. “However, the company is continuing to hire and within the last week hired three new employees and options are being explored for the displaced workers.”
The Madison office will be the largest for Core BTS and it will provide marketing, human resources, internal IT services for the entire organization. The company’s CEO, Don Eckrod is headquartered in Falls Church, Virginia. The accounting function will be centralized at the company’s Indianapolis office. To avoid market confusion and to avoid negative thoughts about the company ownership and operations, Inacom will have dual names as it transitions to its’ name, Core BTS.
“I was hired six years ago by Inacom to take the company to the next level, and build an exit strategy for the founders, that would continue to embrace an established and well-respected company culture of strong values for employees, and a strategy that would both grow the company and enhance it’s customer offerings,” Albi said.
In a sent to letter to its clients and partners on Friday, Albi said, “The merger of Core BTS and Inacom is truly the consolidation of two talented organizations similar in vision and culture. Core BTS is a privately held company and will remain as such. The newly expanded Core BTS will leverage the strengths of the respective merged organizations in our expanded product and service offerings, resources and relationships with key manufacturers. Core BTS will also realize stronger positioning with key suppliers, allowing us to better influence the offerings brought to you, our valued customers.”
Albi also announced that Bryan Bechtoldt would remain CTO, reporting directly to him. Bryan will continue to focus on the development of technology architecture throughout the expanded Core BTS footprint. Teri Bruns will be VP of Sales for the Midwest, concentrating her efforts on growth initiatives within the Midwest regions while continuing to provide leadership within existing and new data center customers.
Inacom’s Learning business will continue to be a service offered by the company and expanded offering for Core BTS. This unit will be known as Inacom Learning, a brand that is well known and respected nationally in the IT training community and will report to Albi.
Don Eckrod, CEO of Core BTS, told WTN News, “We have joined forces with a number of companies over the years and Inacom’s management, employees and especially their technical staffs expertise, and dedication to hard work have already formed a strong relationship with our company. In just a short time Inacom’s technology group has been a great asset for us in integrating both companies IT operations, which will be maintained in Madison. We will use Inacom’s network operations center and data center to run our business and to offer it as a service to our customers. They have already integrated both companies e-mail and some data management systems.”
“This acquisition substantially increases our base of technical talent and enhances the breadth of service offerings for our company overall. Our deeper talent pool will allow us to increase our existing focus in the unified communications and collaboration space, but we are especially excited about Inacom’s current data center practice,” Eckrod said.
“Core BTS will bring Inacom’s customers our experience in video conferencing, voice, video and data services. We have a great deal of experience in selling data carrier circuits and are a reseller for Verizon and AT&T. This expertise will be brought to Inacom’s existing customers as we have the ability to sell bandwidth and other carrier based solutions. As many of our competitors are shrinking, we continue to grow and are very happy with our success.”
Founders Equity Inc., based in New York, provided the equity financing and arranged for the debt financing necessary to enable the transaction. J.D. White the managing member and partner of Founders Equity, and who serves as Core’s chairmen of the board told WTN News, “We looked for an investment that would be a natural progression for Core BTS, that would have a good management team, and technical resources that would expand our presence in Wisconsin and around the country. Our strategy is to grow the company geographically and to be an organization focused on network infrastructure for enterprise and commercial customers.”
“The deal was financed by my firm’s existing investment fund allocations and that existing lenders stepped up to support the Inacom business,” White said. No purchase price was revealed.
“We were active in the market and looking for a large Cisco value-add reseller (VARS) that could cross the chasm to offer emerging technologies of voice, data and security and were introduced to Inacom’s Albi, Benson and Mortenson. We saw tremendous synergies with Inacom’s strength in high-end data center operations, management and managed services and Core BTS’s broad installed base of customers with unified communications, telecommunications and transport services.”
“Over the past several months I have met with the Inacom management team and visited then in Wisconsin and at our offices in New York. I am very impressed with their depth of industry knowledge, relationships with manufacturers and suppliers, and the knowledge of their personnel. We believe that together we will create a more dynamic technology infrastructure company and will strive to accomplish this on a national level,” White added.
Founders Equity has seven companies in it’s current portfolio with Core BTS being the only IT services company in the portfolio that spans from investments in health technology, to payroll services, to food services.
“This is a great story for the company and its founders” Albi said.
“It’s the American Dream for the founders to archive by building a successful company and to sell the firm to a company and a management team that will allow their dream to continue. The goal for Benson and Hoffman and on behalf of their employees was to sell to a complimentary company, and remain a private company.” Albi added, “These are two equal companies with Core having an East Coast and Midwest presence and Inacom having a strong base of customers in Wisconsin. We will continue to serve the clients we have while we look for a West Coast acquisition and we will get to do what we want to do…and I’m excited to grow our company!”
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