Last week it happened to us in our MSP. A client we’ve had for years got acquired by a private equity firm. Funny enough, we did a webinar on exactly this topic two weeks ago. I followed my own advice, and I want to share what that looked like in practice.
What happened
Our client hired a new CFO. Which is interesting because it mirrors the example we used in the webinar almost exactly, except that in this case, the client hired the CFO themselves, not the PE firm.
We got in front of it immediately. We got a meeting and started asking questions. What’s the time horizon? Five to seven years, confirmed. What’s the objective? 4X EBITDA, a mix of organic growth and acquisitions. Then we said: we need to sit down and map this out, because this is going to have major impacts on IT, and we need to move fast.
That’s when I could see we were really making our client think. They hadn’t fully thought through what this growth trajectory meant for their IT environment. The questions we were asking showed them we’d been through this before, that we understood what was coming, and that we’d helped other clients navigate it.
We’ve always had a great relationship with this client, and they already saw us as their trusted technology adviser. But after that meeting I think that relationship took on a new dimension. Not only does that continue, but now they also know we’re the partner who can help them work through this growth phase specifically, because we’ve been there before. I think that was very reassuring for them.
The next step is sitting down with them to build the plan. What does 4Xing the business actually look like operationally? If things go well, they could double in two years. That means onboarding many new employees, integrating acquisitions quickly, and having a scalable infrastructure to support this.
Build a process for this internally
What we’ve started doing in our MSP is coaching our vCIOs to listen for triggers. A client mentions an audit. They’re looking for investors. New partners are coming in. Those are signals, and when we hear them, we want to know about it immediately.
We already have a point of contact change process, which I wrote about in a previous post. We’ve now built an ownership change process alongside it. When ownership shifts, we escalate. As owners, we get personally involved. That’s part of our process now.
When a PE firm comes in, you’re either going to be seen as a strategic partner or you’re going to be cut out. There’s no middle ground. Getting in front of it early is the only way to make sure it’s the former.
Watch the full webinar
We covered this in depth in our most recent webinar, Winning the Boardroom. We walk through the PE playbook, corporate structure, financial concepts, and how to show up in that first meeting with the new CFO. If this is happening with any of your clients, it’s worth a watch. Share it with your vCIO team too; it gives them the business context they need to have real conversations when ownership changes happen.
Simon is the President of S3 Technologies, a leading Canadian MSP he co-founded in 2003. He built and scaled the vCIO team which eventually lead to him co-founding Propel Your MSP in 2018 to help MSPs with their vCIO services.
