Sirius to Top $1 Billion in Sales with MSI Systems Acquisition
December 13, 2010 Timothy Prickett Morgan
The availability of cheap money gathered up by private equity firms to make acquisitions has combined with an IT industry consolidating on so many fronts it can make you dizzy. And that is why it is really not much of a surprise that Sirius Computer Solutions acquired MSI Systems Integrators for an undisclosed sum. Both are among the largest players in the IBM Power Systems market, and have histories that stretch back to the AS/400 days.
Sirius is over 30 years old and is based in San Antonio, Texas. The company currently has 665 employees with a combined 3,800 different technical certifications. The privately held company has financial backing from private equity firm Thoma Bravo, which kicked an undisclosed amount of cash to Sirius back in November 2006 to get an equity stake. Thoma Bravo is well known to readers of The Four Hundred since the private equity firm bought high availability software makers Vision Solutions, iTera, and Lakeview Technology and glued them together in 2006 and 2007, and just this year acquired Windows HA vendor Double-Take for $242 million. Thoma Bravo was also one of the investors in the Attachmate conglomerate, which added together host access and application transformation vendors Attachmate and WRQ and systems management and security tool vendors NetIQ and PentaSafe. By the way, Thoma Bravo has a hand in the $2.2 billion acquisition of Novell by Attachmate, which was announced two weeks ago.
Thoma Bravo is showing legacy software businesses more attention than either IBM or Novell have done in a decade. If you have ever wondered what you would do if you could buy the IBM midrange business, think about this: Orlando Bravo and Scott Crabill, the managing partners at the private equity firm who have been behind all of these investments, do not have to wonder. They seem to be doing it, bit by bit, and they know.
MSI Systems Integrators, based in Omaha, Nebraska, was founded in 1994 and has grown to over 400 employees, generating more than $350 million a year in sales. The company operates in 17 states in the central and western part of the United States, and 180 of its people are IT consultants, engineers, specialists, and project managers that do what the company’s name suggests: integrate systems. And in particular, we are talking about IBM’s System z, Power Systems, System x, and BladeCenter systems as well as Hewlett-Packard‘s ProLiant and BladeSystem machines. The company’s techies have over 700 certifications on various technologies, and also helps design data centers or help customers select co-location services for their iron. MSI also operates what it calls Technology Enablement Centers in its home base of Omaha as well as in Des Moines, Kansas City, Minneapolis, Peoria, Portland, Salt Lake City, and St Louis. These centers are where MSI has been showing off new technologies to customers as part of its sales pitch; they are also a key aspect of why Sirius was interested in buying MSI.
With the acquisition of MSI by Sirius, all of those techies and skills can be replicated on the U.S. national scale that Sirius operates at. Sirius is an IBM and HP partner, just like the company it is acquiring, and is also a partner of NetApp for storage and Cisco Systems for networking and its “California” Unified Computing System blade and rack servers and their converged 10 Gigabit Ethernet system-storage networks.
Sirius says that now that it has acquired MSI, it has close to 1,100 employees who have over 4,500 technical certifications. The combined firms will have more than 400 sales reps and more than 450 product specialists and technical consultants. Sirius will have close to 40 office locations, and hundreds of employees that provide wider coverage from home offices. (There is no shame in saying this in 2010; in fact, it is an asset and a cost cutter.)
The financial terms of the acquisition of MSI by Sirius were not disclosed. Jim Simpson, who is president and chief executive officer at MSI, will be staying on at Sirius helping to grow the Cisco-related business at the company. So don’t think that this deal is just about cornering the market on the IBM Power platform. The world is more complicated than that.
Sirius was founded in 1980 by Harvey Najim. At the time the company was known as Star Data Systems. Prior to that, Najim spent 13 years at IBM in various technical, marketing, and management jobs.