Who are the top 5 acquirers in IT & Business Services?

Back in October last year, we reported that the IT & Business Services sector had just enjoyed bumper M&A activity, with more deals reported in 1H2023 than in any six-month period on record. Now, the release of our most recent IT & Business Services M&A report has confirmed that the sector has remained on bullish form since that data was compiled, with 2H2023 seeing the third-highest deal volume on record.

As Hampleton Partners MD Konstantin Kastius comments in the report, the high numbers “underscore continuing demand for enterprise services and solutions that are increasingly vital for remaining competitive and overcoming expertise deficits in an age of pedal-to-the-metal digital acceleration.”

So who are the acquirers most actively responding to this demand by making numerous deals in the sector? Let’s run through the top five most prolific players.

Consultancy giant Accenture has consistently been the biggest buyer in IT & Business Services. By our last count it had snapped up 64 companies in this space during the past 30 months, which is dozens more than the next most prolific buyer.

There has been notable inorganic growth of its Italian division thanks to several key acquisitions in that territory. The emphasis has been on increasing Accenture’s presence within Italy’s public services ecosystem, thanks to takeovers of SirfinPA and Customer Management IT, a pair of jointly-owned consultancies that provide tech solutions in the justice and public safety sectors, and Intellera Consulting, one of the biggest consultancies catering to local governments, universities and healthcare institutions.

Accenture has also been busy elsewhere in the world, with another notable acquisition target being Incapsulate, a Salesforce Summit Partner based in Washington DC-based. The move brought hundreds of new Salesforce strategists into the Accenture fold, boosting the giant’s already formidable presence in the Salesforce sphere.

A perhaps unlikely presence in the top tier of IT & Business Services acquirers is US company Pye-Barker, which specialises in fire extinguishers, sprinkler systems, fire detection systems, and emergency maintenance services.

But despite not primarily being a “tech firm” as such, Pye-Barker – which was founded back in the 1940s – has mounted an ambitious acquisition campaign in the industry, amassing 28 companies and massively expanding its service capabilities over a 30-month period.

Among the targets have been the integrated security and fire detection systems specialists Alarmguard Security and Sentry Watch, both of which are headquartered in Greensboro, North Carolina, and whose acquisitions form part of a consolidation strategy within the Carolinas.

Pye-Barker has also enjoyed remarkable organic success with a 621% three-year growth rate, and hopes that its aggressive acquisition strategy will accelerate its journey to becoming “the national provider of choice for full fire code compliance” in the United States.

The third-most prolific acquirer in IT & Business Servcies is Upstack. The New York-based digital transformation consultancy specialises in data centre, network architecture, cybersecurity and contact centre as a service solutions, and has complemented its organic growth with 19 acquisitions over the past 30 months.

One of these was Network One Solutions, a California-based consultancy specialising in cloud solutions, data networking and security, whose rapid growth to encompass more than 400 clients made it a highly sought-after acquisition target. It eventually picked out Upstack among a host of bidders, partly because of Upstack’s highly proficient team and expertise on emerging technology.

Another notable Upstack acquisition has been Progressive Communications Management, a Florida-based tech advisory firm which provides guidance on optimal cloud, network and communications strategies. Upstack cited PCM’s emphasis on bespoke customer-focused solutions as a major draw, while PCM recognised Upstack’s takeover as an opportunity to “grow our client base while expanding our team and solutions expertise.”

The only UK acquirer in the top five is Babble, which offers a range of business services relating to IT support, cloud management, cybersecurity and communications. The company has made 19 acquisitions over the past 30 months, with three announced in just one day alone back in July 2023.

Described in the tech press as a “triple-whammy”, the purchases of London-based telecom services firms Talking Technology and Unicomm, together with Sunderland-based communications and IT reseller NTE, meant that Babble added 2,100 customers and 30 colleagues at a stroke, consolidating its position as one of the country’s biggest IT & Business Services companies.

Babble’s CEO explicitly hailed the company’s “buy and build” strategy as being the right approach for keeping up with the rapid pace of change in the workplace, and the widespread awareness of “the importance of technology in accelerating business productivity and profitability.”

Taking its name from the Pareto principle – namely, that 80% of consequences stem from 20% of the causes, with every industry being dominated by a small contingent for successful players – The 20 MSP is a managed IT services provider and the fifth most-prolific acquirer on our list, with 15 deals made in a 30-month period.

The 20 MSP’s drive to massively increase its footprint via strategic deals has included the purchase of Tennessee-based Cirrus IT Solutions and Virginia-based IT services firm Manus Dei, both of which were already part of The 20 MSP Group – an affiliated consortium of managed service providers across North America.

The 20 MSP’s CEO has acknowledged the unique nature of the company’s strategy of only purchasing companies which are already part of this consortium, saying: “We don’t have to go hunting for quality MSPs and then figure out how to integrate them. The secret sauce is that we actively cultivate these MSPs through our group, ensuring they embody our values and way of doing business long before any deals are on the table.”

Read more about how IT & Business Services is one of Hampleton Partners’ key areas of expertise, and get in touch if you’d like to know what opportunities are available for your company within today’s M&A marketplace.