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Park Place to continue on acquisition trail following MCSA deal - CEO

Third-party maintenance firm acquired £50m-revenue MCSA last month

Third-party maintenance firm Park Place Technologies will continue to make acquisitions as it bolsters its presence in the UK and Europe, according to CEO Chris Adams.

Park Place acquired £50m-revenue services firm MCSA earlier this year.

Adams (pictured), who was promoted to CEO at the start of the year, told CRN that Park Place has rapidly grown its European operation from £1m in 2015 to over 20 per cent of total revenue now.

"We've always been a global company but we used to use partners to deliver internationally and our revenue outside the US was very small," he said.

"In 2015, we entered the [European] market in a more formal way in the UK.

"We have since become the largest player in Europe in the last four years and with this acquisition our revenue jumps, on the maintenance side, to north of £50m, maybe close to £60m.

"When you include the other services through MCSA, we're probably over £70m but in terms of maintenance companies, I believe this makes us the largest in Europe now."

Adams said that Park Place's rapid growth is born out of an internal structure that sees all sales driven out of one of its main hubs in Cleveland, Denver, London and Singapore - not from an external sales team.

The chief executive claims that this is why the firm can operate both direct and channel models.

He said that the current split of business is around two thirds direct and one third channel.

"We can manage how they work with both customers and channel partners and make sure that we don't violate the rules of engagement for the channel," he explained.

"I think that sometimes for our competitors it's a little harder to manage the customer relationships with an outside salesforce. There are challenges and I think we are able to effectively manage that because of our model."

From a channel perspective, Park Place will generally partner with resellers if it is more convenient for the client, Adams said, explaining that the majority of the firm's channel business comes from the resale of its service.

"We partner with channel organisations because that often makes more sense for the customer," he said.

"If the customer already has a relationship with CDW in the states and it's a new customer for us, we'll pick up the phone to CDW to say we've got an opportunity and ask if they're interested in partnering with us.

"Vice versa, a lot of times those partners will present us side by side to the customer and add us to the quote."

The recently acquired MCSA business is known for its maintenance capabilities, but also had a healthy base of customers for which it was a managed service provider.

The rationale for the takeover was the firm's maintenance credentials, Adams said, but Park Place will not turn its back on the managed services operation.

"We have a managed services practice within Park Place and so when we see those businesses they are also a good fit for us," he explained.

"We don't focus as much on hardware and that is mostly because, in our experience, go-to-market is a little harder when you're a smaller company and so you tend to have a wider range of offerings.

"MCSA is consistent with some of the other companies of that size that offer hardware, managed services and maintenance, so when we pick those up we continue to do that. Our core competency has always been in the maintenance space but we will offer those other services."

MCSA was ranked 80th in CRN's Top VARs 2018 research, with sales of £49.2m.

Chief exec Adams said that MCSA will be completely integrated into Park Place, rather than operate as an independent subsidiary.

"I saw a quote recently that said culture eats strategy for breakfast, and our success comes from the culture of our company, and whenever we acquire a new one it is imperative that we bring them in and integrate them," he said.

M&A trail

Adams said that we can expect Park Place to continue to be acquisitive over the coming months, as it looks to cement its fast-growing position in the UK and Europe.

Park Place made a spate of acquisitions in the UK a couple of years ago, including that of NCE Group and Com-Com.

"From a strategy perspective we have a dedicated team that focuses on sourcing through to the integration of deals," he said.

"We make sure that we spend a lot of time in the diligence phase understanding the business and we make sure that post-close we quickly move to bring that company into our family. That is the process.

"Relative to our continued acquisitions strategy, it is opportunistic. If a company comes up, we evaluate it.

"We have to make sure we have the capacity; we don't want to strain our resources and our people, but we haven't had to walk away from much. The key there is whether it's a cultural and business fit."

Adams also believes that, as time goes on, it will become harder for smaller maintenance firms to take a decent-sized chunk of the market.

"The total addressable market (TAM) globally is massive," he said. "So for small players, there are always places you could grow your business.

"We're small relative to the TAM, so I still think there are places for other companies to fit and as they get to a certain size and they get attention, companies like us will knock on their door.

"Maybe the challenge would be those smaller companies going to mid-size or large. That's maybe where it will get a little bit more difficult."