Ever since the Dec. 14th, 2009 announcement that Metafore and Microserv were merging to create one of the largest IT solution providers in Canada, there was no doubt that other solution providers will be keeping tabs on them and how they progress in 2010.
Before this merger, which officially closed during the first week of 2010, both Metafore and Microserv were operating pretty well on their own for more than a decade. Metafore reported revenues of $225 million, while Microserv surpassed the $150 million mark in earnings.
But something changed inside of Hartco, the parent company of each. According to Bryant Jackson, vice-president and general manager of the Western portion of the new company, Hartco thought it made sense to operate as one brand, and that one company would have the leverage to work with national clients.
“It would be easier for national clients to work with one company than working with one company and its sister company. We wanted to create one brand across Canada and become a national VAR and get synergies in class of business and go to market strategies,” Jackson said.
The merged company will be run by an office of the president. Jackson, along with David Kelly (Central Canada) and Michel Lacasse (Eastern Canada), will make up that office for Metafore.
“Accountability will be shared at the regional level because we do business with companies that operate their businesses at the regional level,” said Jackson. “The buck stops at the region. We can be there quicker and address the situation faster.”
Microserv’s Lacasse added while the three executives will together make decisions on the strategic direction of the new Metafore, day-to-day each will manage their respective regions. The executives will also report into parent-company Hartco.
James Alexander was a founder of Metafore and a partner in the company when it was acquired by Hartco in 2002. Now an analyst and senior vice-president with London, Ont.-based Info-Tech Research Group, Alexander said the three-person office of the president that will lead the new Metafore caught his eye.
“What I find quite ironic about that is when we first formed Metafore we had the same issue: a bunch of owners coming together owning pieces of business,” said Alexander. “One piece of advice (Hartco CEO) Harry Hart gave us was don’t try to run a business with more than one boss. Who’s the ultimate boss? Probably (Hartco president) Pat Waid.”
Combined, Metafore Technology Inc. has the potential to be a $400 million-plus solution provider, but the objective for the new entity is not to maintain the revenue they have today, but to grow the business. Jackson said that the combined team has already reached out to existing customers to retain them and each region has plans to acquire new accounts to go after, and acquisitions are also not out of the question.
The new company has already completed its integration, as it was started prior to the announcement.Metafore going forward will have many strengths, such as an experienced leadership team, diversified client base and depth and breath of product solutions. Jackson believes that new company will find a higher place with vendor partners such as Cisco Systems, HP, IBM, Lenovo, Microsoft and VMware.
“Both companies were leaders in the infrastructure space and virtualization,” he said.
But there will be a new focus on print management. Microserv was growing a strong business in that area and Jackson said the new company will look to implement that business across the country, along with managed services and service desk offerings.
Besides print management, the new Metafore will try to establish a unified communications practice.One thing that could distinguish the new Metafore from others in the channel is its new army of IT professionals. The combined company will sport more than 1,000 IT professionals. Jackson stated that while they are not in the same area code as CGI or IBM Global Services Canada in terms of headcount, this team will make up a large portion of its IT services division. “It makes sense for pre-sales, design, architecture and, most importantly, the support side of the business,” Jackson said.
Jackson sees little overlap between the two companies, and anticipates minimal redundancies and no planned layoffs resulting from the merger.
There is some minimal overlap on service in Quebec and most backend functions, such as human resources and accounting, are already shared between the two companies. Microserv’s Lacasse said the timing for the merger was right because both companies have evolved significantly over the last couple of years, including the creation of a new enterprise solutions group.
“A lot of what we’ve been carrying to market is something we can bring to our shared customer base across Canada,” said Lacasse. “By putting our teams together it will be easier to maintain the levels of service.”