The managed services market doesn’t look like it did ten years ago. Five years ago. Two minutes ago. M&A has undoubtedly rearranged the IT terrain, becoming one of the most prevalent trends over the last few years. With investment dollars surging into the sector, MSP mergers and acquisitions, as well as private equity deals, are at an all-time high.
In an industry absolutely inundated with such activity, New Charter has a rather unique approach.
The Private Equity Road Less Traveled
Rather than following the traditional PE model, which typically means consolidating businesses to reach new growth and service delivery levels, New Charter’s foundation is centered around the idea of enhancing the entrepreneurial journey. New Charter preserves and accelerates organic growth for high-performing MSPs. Business owners continue to lead their companies, and retain clients and employees while enjoying the benefits of scale.
New Charter is an investment partnership that has “acquired” a portfolio of 21 (and growing) companies operating in 28 cities. It’s a unique model that elevates companies in their market instead of smashing them together as traditional PE models do.
Therein lies the distinction. This is not your everyday model.
The distinction is that New Charter provides a true equity partnership that preserves the culture of each company and accelerates their entrepreneurial journey. In turn, the businesses are collectively involved in the future success and growth of the company.
“New Charter offers the best of both worlds for MSP founders and leaders who want to continue to run the businesses they’ve built, while receiving investment and support that will help them grow,” says Mitch Morgan, CEO of New Charter Technologies. “We help qualified MSPs monetize what they’ve built, prioritize people, and protect their legacy. With New Charter, these founders run their own companies while also participating in the leadership team of an organization well on its way to being a dominant player in the industry.”
Essentially, New Charter looks to acquire MSPs that show significant revenue, impressive EBITDA, a focus on true managed services, and a healthy recurring revenue stream. The value proposition is three-fold:
- While New Charter uses investment money to grow their individual businesses, they will all ultimately exit together as a much larger business and at a much higher multiple.
- The individual businesses share best practices in order to more quickly improve and evolve their organizations. They also have access to enterprise-level tools and systems, proprietary methodologies that support innovation and growth, and top talent.
- We retain and proactively prepare our employees to become the next generation of leaders through our FrontRunner methodologies and ExecutiveEdge leadership programs.
“We’ve really attracted entrepreneurs/company owners who want to focus on continuous improvement – who aren’t “done” yet,” says Morgan. “They want to be a part of something. They want to continue to grow their businesses and take care of their people and become forces in the industry.”
For Tim Farmer, president of System Solutions, a New Charter Technologies company, the whole process of New Charter has been a game changer.
“I was only capable of taking our company to a certain level,” says Farmer. “My employees can now network and collaborate with the employees of other New Charter companies, sharing best practices and ideas. Additionally, New Charter is different in the marketplace because they didn’t want me to change a whole lot of things about my company. All of my employees kept their jobs, which was really big because some have worked for me for over 20 years.”
You can hear from a few of the business owners who joined New Charter in this video.
A Rising Tide Lifts All Boats
Ok enough about us (well, sort of). New Charter also has a pretty deep outward, give-back drive interwoven into the fabric of the company. This is easily one of New Charter’s key tenants. There is a commitment to the industry and actually wanting to see it prosper.
The individual operating companies that make up New Charter have a few things in common that resonate with New Charter’s ethos, and one of them is that a ‘rising tide lifts all boats’. It’s really a perfect analogy – one that is perhaps overused, but powerful and accurate nonetheless.
“There’s a common thread that runs through New Charter, and that is people who want to learn, and to give back,” says Christopher Luise, CEO of Adnet. “To see an organization, especially in the private equity space, that really understands culture and wants to build upon it instead of destroy it… that’s why we’re here.”
Because of its growing portfolio of 20+ top MSPs, New Charter is rather uniquely situated in the space as it is able to tap into the resources of those companies. Because of this, New Charter and its MSPs are able to develop a rich set of best practices to share with the managed services community.
“For those in the industry that seek continuous improvement, we want to help,” says Brent Whitfield, founder of DCG Technical Solutions, and director of equity partnerships at New Charter Technologies. “We feel it’s our turn to give back and share what’s made us successful. As we build out New Charter, we know it’s in our interest to help the entire industry be healthy and vibrant by sharing our FrontRunner methodologies.”
“The managed services space is a special industry of coopetition, personal relationships, and the sharing of best practices,” says Peter Melby, founder of Greystone Technology and CRO at New Charter Technologies. “We believe that helping MSPs reach their full potential is good for the industry, and therefore good for us.”
New Charter seeks out and partners with organizations that are hyper-focused on continuous improvement and are growth-oriented. Morgan stresses that every MSP has the potential to reach this level, but it can be a long game. It takes discipline, an appetite for risk, and an intimate understanding of KPIs and how to reach ultimate success.
“New Charter is people-centric, which means we understand the value that every client, partner, and employee brings to each MSP,” continues Morgan. “As an industry, we want to crack the code on how to stay true to that tenet. As far as New Charter goes, we want to help.”
The Bottom Line
The founders of New Charter saw what was happening in the world of M&A, and decided to forge a different path. Unlike any traditional private equity model, New Charter provides a true equity partnership for the managed services market. This allows the owners/TSPs that join to truly preserve their company’s culture and accelerate their entrepreneurial journey with the support of a scaled organization.
Want to learn more? Check out our equity partnerships page that dives a little deeper into the M&A landscape and the unique New Charter Technology investment opportunity.
