ASG buys NetVersant's Mid-Atlantic piece
BELTSVILLE, Md.--ASG CEO Joe Nuccio told Security Systems News in early May the company has purchased the assets of NetVersant’s Mid-Atlantic operations, picking up roughly 20 employees and a number of federal, state, and local government contracts, along with some high-end commercial contracts.
“We already have a large powerhouse in the Mid-Atlantic,” Nuccio said, “so this fits right in.” Asked if the contracts were distressed in any way due to NetVersant’s recent bankruptcy proceedings, Nuccio said, “the interesting thing about it is that the Mid-Atlantic region was actually a very, very good performer. We had the opportunity ahead of time to talk to the customers and they were quite happy with the previous service they were getting, and they’re excited to continue with the same employees. We took a pretty hard look at it.”
New NetVersant CEO Rob Macchi, formerly the company’s VP of sales and business development, said the Mid-Atlantic operations were not core to the company’s growth plans following its emergence from bankruptcy and its purchase by Patriarch Partners in January.
“This is not an indication of the company’s feelings with respect to the security market,” Macchi said. “We’ve never been a big player in the Mid-Atlantic market and that market definitely has its core players ... That doesn’t mean that we didn’t have some outstanding people and customers there, but we just felt like it was a good opportunity for the company to regain its focus back in its core geographic markets.”
He described those core markets as the Pacific Northwest, California, Texas, and the Northeast and New England. In addition to the Mid-Atlantic sale, Macchi said, “we’ve sold, or are in the process of selling, certain assets in certain markets to prior employees or principles. And we’ve created partnerships with strategic subcontractors and integrators and have helped employees find jobs at those firms.”
There are “no more anticipated asset sales at this time,” he said.
The core markets NetVersant will focus on going forward are markets, Macchi said, where NetVersant has strong offerings in all four of its business lines: wireless integration, telephony, network infrastructure, and security. Currently, he said, security makes up roughly 25 percent of revenues.
The Mid-Atlantic operations will be added to ASG’s Washington branch, which ASG CFO Ralph Masino said is now over $1 million in RMR. Nuccio emphasized that the NetVersant accounts there often had strong RMR components.
Terms of the acquisition were not released, but Nuccio said, in broad terms, he’s seen multiples come down a little “because the world’s changed a bit. Oddly enough, though, if I kind of take a snapshot of the last five years, the environment for acquisitions seems to be the same. The companies that we’ve targeted, these are all very good companies that don’t really need to sell. We’re not seeing a lot of distressed companies out there.”
While NetVersant was recently a distressed company, Macchi said the support of Patriarch Partners, along with the experiences of the bankruptcy process, has left NetVersant “doing very well. We are, unlike a lot of integrators in the market, continuing to have a good amount of success. We really haven’t lost any core customers in the process ... [the bankruptcy] ended up being a very positive process for us.”
Asked what he learned going through the process, Macchi said he simply took to heart that “the focus on good core business fundamentals is always important ... Being able to quote a job at a respectable profit and being able to deliver it on time with quality and integrity and have a happy customer and a good bottom line is what allowed the company to flourish in the first place. When you look back at the bankruptcy, it allowed us to restructure the business in a manner to get back to those objectives.”