Navigation Capital Partners, an Atlanta-based lower middle market private equity firm, has formed Stratos Management Systems Inc. The company will acquire and integrate IT and managed services firms focused on hybrid IT environments, including private cloud, virtualization, storage and security, the firm says. The firm also completed its first acquisition with the new business, buying Nexus Information Systems, an IT provider of virtualization, storage and managed services. Terms were not released.
Navigation Capital Partners (NCP), an Atlanta-based lower middle market private equity firm, announced the formation of Stratos Management Systems, Inc. (Stratos), a platform designed to acquire and integrate IT solutions providers and managed services firms focused on building and maintaining hybrid IT environments, including private cloud, virtualization, storage, security and networking elements. Stratos has completed its first acquisition, Nexus Information Systems (Nexus), an IT provider of virtualization, storage and managed services.
Nexus, based near Minneapolis, provides a scalable platform to serve Fortune 1000 and mid-sized firms in the Midwest and beyond. Nexus’ specialties include virtualization, data storage, disaster recovery, networking, servers and the technical and managed services surrounding each of these areas. Nexus has expertise in the healthcare, manufacturing, professional services, technology, hospitality, local government and education segments.
“Nexus is consistent with Navigation’s prior ‘buy and build’ investments in high-growth industry segments, and is a very scalable opportunity in an investment category where we’ve spent considerable time,” said Larry Mock, managing partner of NCP. “Additionally, we’ve got an experienced management team of individuals with a deep understanding of the IT services sector that we know well.”
NCP has appointed Ron Farrell, Bret Kidd and Ken Brown as chief executive officer, president and chief operating officer, and executive vice president of Stratos, respectively. Farrell is an experienced technology entrepreneur while both Kidd and Brown are 20-year veterans of the IT services sector, serving in leadership roles at EDS, Hewlett-Packard (HP) Enterprise Services and in private equity-backed firms. Kidd was most recently General Manager of HP’s Global Public Sector group, which focused on the applications and BPO business in the government sector. Brown worked as the general manager of Industry Software and Services, where he launched and ran HP’s Global Hospitality practice.
NCP plans to enhance professional and managed services capabilities for Nexus’ existing customers, and grow the Stratos platform through both organic development and additional acquisitions in new geographic markets. NCP has been working with the executive team for the last 12 months, and has already identified a number of attractive acquisition prospects that complement Nexus.
“Today companies are facing a rapid migration to what many call the ‘third major technical platform,’ driven by innovations like the cloud and the explosion of data,” said Kidd. “Therefore, the marketplace needs a strong partner to help build and manage a hybrid environment encompassing private cloud, public cloud and traditional technical models. Our plan is to acquire great firms like Nexus in several underserved geographic markets, and then build on their deep client and vendor relationships by broadening and enhancing the services portfolio. Our scale will provide increased visibility of the market as well as the ability to serve client needs on a national level.”
“We’re confident that we’ve got a comprehensive plan in place,” said Mock. “With additional acquisitions and organic growth opportunities, we expect Stratos to grow to $200 million in revenue.”
About Nexus Information Systems
Nexus Information Systems (Nexus), based near Minneapolis, is recognized as a regional leader in data center solutions and services for small to medium-sized businesses as well as large enterprise clients. From architectural design to implementation, Nexus’ focus on virtual infrastructure, business continuity, backup/archiving, networking, client computing, and managed services empowers clients with the technology required to meet ever-changing needs. Nexus is devoted to the core values of client satisfaction, integrity, and accountability to continue the company’s history of quality services and solutions. For more information, visit www.Nexusmn.com
About Stratos Management Systems
Stratos Management Systems, Inc. (Stratos), based in Atlanta, was created to be an industry leader in building and managing hybrid IT environments including private cloud, public cloud and traditional infrastructure models in Central and Southeastern U.S.
About Navigation Capital Partners
Navigation Capital Partners (NCP) is an Atlanta-based private equity firm making control growth and buyout investments in lower middle market companies. The managers of NCP formerly founded and managed Mellon Ventures, the private equity investment partnership of Mellon Financial Corporation. With the backing of Goldman Sachs Private Equity Opportunities Fund LP, NCP acquired the private equity portfolio of Mellon Ventures in December 2006. NCP currently manages approximately $306 million of invested and committed capital.