US-based Evergreen Services Group eyeing three Australian IT channel firms

US-based Evergreen Services Group is planning to expand its Australia and New Zealand (ANZ) presence with the acquisition of three Australian IT channel firms.

The San-Francisco-based company, which describes itself as a holding company, launched in 2017 with the backing of private equity firm Alpine Investors and has since acquired 75 IT businesses in the US, Canada, UK and New Zealand.

In January 2024, Evergreen broke into ANZ with the purchase of Auckland-headquartered MSP Lancom Technology.

The company’s VP of M&A Sydney Hockett told CRN Australia that Evergreen plans to expand its ANZ presence in 2024.

“…we'll aim to do many more acquisitions this year and beyond. We've acquired Lancom, we have three others that we're currently in diligence with right now,” she said.

“So [we’re] ramping up our pipeline pretty fast [and] we would hope to finish 2024 with a good few more under our belt.”

The three companies Evergreen is doing due diligence “fit the profile of your traditional outsource IT provider for SMBs [and] SMEs,” Hockett said.

Why MSPs attract Evergreen

Managed services providers make up the bulk of Evergreen’s 75 acquisitions, which also include security and telco firms.

“We love the predictability of the [MSP] business and how locked in that that revenue is. I think another component is just how mission critical the services are,” Hockett said.

“As we think about industries where we invest, it's really critical that these are businesses that are going to be around for a long time, not just for five or six years, and so we feel strongly that while technology and the services will adapt, and we've already gone through some iterations of that, MSPs will still exist, so it fits well with our model.”

“Thirdly, it's a highly fragmented market and there's thousands of MSPs and in every geography that we operate in, so it's a pretty big M&A opportunity for us.”

Hockett explained Evergreen’s investment model. “The impetus behind why our founders started Evergreen is that they wanted to invest on a much longer term time horizon than your traditional…model of buy a business and sell it off in a couple of years,” Hockett said.

“We never sell the businesses we buy and our mission is really to be a permanent home for companies.”

Support for acquired businesses

Via offshoot Lyra Technology Group, Evergreen supports its IT businesses via regional leadership teams.

“They focus on things like ‘how do we have beneficial relationships with key vendors in this space?’ How do we facilitate cross sell between our businesses,’” said Hockett.

“We have a business in the US that has some customers in the UK now and they are leveraging our UK MSPs to help service those customers and vice versa.”

“[If an Evergreen business needs] help building out a sales and marketing function; we have a full growth team that has built that out and has playbooks that they can implement at our businesses and that are repeatable."

“Recruiting is a big pain point that a lot of MSPs have. We have a people team that assists with recruiting, all the way from executives down to the technical level in our businesses; finance support, all of those key functional areas, we have resources to help support that and build out those teams at our businesses.”

With Evergreen set to add to its ANZ acquisitions, Hockett said the company will expand its leadership team into the region in 2024.  

“We're in the process of building out that leadership team in Australia and New Zealand [and are] really committed to adding on the ground…localised presence.”