David Westrheim, president and CEO of Richmond, B.C.-based intelliNet, a solution provider and IT services company that provides on-site IT service throughout Canada, says he wants to accelerate the company’s growth by merging with and acquiring other Canadian solution providers this year.
Prior to founding intelliNet, Westrheim founded and led a company which was then known as TWG, for 16 years before selling it in 1998 to Geac Computer Corp., (which today, has now become Infor) a global software company. Since intelliNet was founded in 2001, the company’s growth has been through successful merger and acquisition (M&A) deals, Westrheim said. On the M&A front, this is momentum for the company he said he does not wish to lose.
“We want to continue to build the company through the acquisitions of VARs (value-added resellers), solution providers, IT service companies, MSPs (managed service providers), ISVs (independent software vendors) and other channel partners,” Westrheim said. “We’re approaching this strategy with a stronger emphasis now and we want partners who sell to corporate accounts and different regions across the country.”
The types of partners intelliNet is interested in are ones who either want to grow their business through a M&A deal, or for those who want to sell their business as a way of exiting the industry, Westrheim said.
Some of the company’s acquisitions include Meridex Network Corp. last July, Orca Computer Business Systems Inc. in 2003, and Network Technology Professionals in 2001.
“We’d like to do one or two deals in the East and one or two deals out West this year,” Westrheim said. “We don’t want to overset goals that can’t be reached though because most M&A deals don’t close. We’re cautious and we want to draw out anyone who’s thinking of merging or selling their business.”
Although he admits that closing M&A deals can be challenging, Westrheim said no deal ever happens unless all parties are happy, because at the end of the day, he said, everyone’s still serving customers.
Unlike intelliNet, Concord, Ont.-based VAR and systems integrator, On The Go Technologies (OTG), had a fate that was less fortunate. Run by Stuart Turk, the company’s former CEO, OTG’s growth strategy was through the acquisition of other resellers to build its base. The company was eventually acquired by Tampa, Fla.-based FTS Group in March of this year.
“It all depends on how you manage and balance the acquisitions,” Westrheim said. “Publicly-traded companies are all concerned with their bottom-line and I don’t think just acquiring businesses is the answer. We’re different because we’re interested in an average of 50 per cent gross margins year after year and our values are around our services and then products,” he added.
In addition to its Richmond, B.C. head office, intelliNet also has an office in Mississauga, Ont. with a total of 40 staff members split between the two locations. The company’s goal, Westrheim said, is to provide customers with on-site IT services anywhere in Canada within two hours of when a request is made. The employees who work in the Richmond and Mississauga offices service the customers who can be reached within the two-hour timeframe; whereas he said the company relies on its 340 independent technical contractors to provide service and support to customers outside of those locations and who may be in remote areas.Along with providing on-site IT services, Westrheim said the company also provides managed services to clients around network monitoring, spam filtering, remote back-up, disaster recovery and more. The company also offers services and support around the Citrix, Linux, Netware, Microsoft, OpenVMS and Unix platforms. By supporting a variety of different platforms, Westrheim said intelliNet easily becomes the one-stop managed service provider stop for many businesses. Some of its existing customers include Bell, Pharmasave, Shoppers Drug Mart and Telus.
“We offer customers a full array of services,” Westrheim said. “We also procure and provide products to our clients as well, but services come first and products are secondary.”
While there are no plans to expand outside of Canada in the foreseeable future, Westrheim said it’s something he thinks about everyday. But for the time being he said, his focus will just be on Canada.
“We think there’s a lot of economy of scale to still be built in Canada and we see lots of room for consolidation,” he said. “We encourage companies who want to grow or sell their business to come to us and we also encourage companies who may not have a fun story right now to think of us as an opportunity,” he adds.