CHANNEL MANAGEMENT The report of another private equity-backed roll-up of technology advisory firms barely qualifies any longer as “breaking news.” It also certainly wouldn’t be the last time this year, or perhaps this quarter, we hear such a pronouncement. In its January report on mergers and acquisitions in the tech space, for instance, Corporate Finance Associates listed more than 60 “major reseller M&A transactions” taking place in the fourth quarter of 2022 alone. Nonetheless, the recent formation of Amplix looks a bit different than the PE/ partner provider activity we’ve seen so far. Rather than moving from the top down, Amplix was formed from the bottom up. Up to this point, much of the PE-based activity in the channel has started with a private equity firm looking to purchase and pull together “complementary” channel partners to leverage their combined customer bases and the economies of scale. The individual partner and advisory firms that are interested in a transaction then vie for that PE firm’s attention. Amplix, on the other hand, initially took form when three independent, New England-based technology advisory firms met up to collaborate over cocktail napkins at a partner holiday event in 2021. For the leadership teams of ROI Communications, Blue Front Technologies and allConnex, the writing was on the wall in a room quickly filling up with consolidating competitors. New and disruptive models were emerging within the market, while at the same time, the complex and varied IT needs of today’s customer often required a broader bench of technical experts, greater client resources and greater leverage with vendors than any of the three companies could provide on their own. “We decided to meet up prior to the event to talk shop,” recalled Joe DeStefano, at the time serving as CEO of ROI Communications, now as CEO of Amplix. “Within a couple hours we had a plan to combine and build a platform, an org chart and a plan to go find the right advisors to take us through the process. We hit the ground running after the holidays.” When plans were initially planted, private equity money, rather than a driving force, was just one of the options to achieving the ultimate objective of getting the best tools possible to service Amplix customer and employee populations, said DeStefano. “It wasn’t immediately saying, ‘Hey, we’re gonna go out and find private equity money.’” The team and its advisors eventually turned to Gemspring Capital, a Westport, Conn.-based private equity firm with $1.5 billion of capital under management. The company is privately held, so the terms of the deal were not disclosed, but the owners of allConnex, Blue Front and ROI Communications remained equity participants and have assumed executive leadership roles in the new entity. Along with DeStefano, that includes Dan Passacantilli, formerly the CEO of Blue Front Technologies who will serve as Amplix chief strategy officer; Amplix represents a new type of partner roll-up By Martin Vilaboy TRUSTED ADVISOR TEAM UP 40 CHANNELV ISION | JANUARY - FEBRUARY 2023
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