Value-added reseller and IT services provider Sirius Computer Solutions has reached a definitive deal to acquire Forsythe Technology, a move that will create the 20th largest IT solution provider in North America.

The deal was first reported in CRN, which cited an unnamed source and an email sent to Forsythe employees on Thursday from CEO Bill Brennan.

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Terms were not disclosed.

The merger is expected to close on Oct. 31, pending regulatory approval.

“This is an extremely exciting time for Sirius and our clients,” Joe Mertens, president and CEO of Sirius, said in a statement Tuesday.

"Combining with Forsythe helps us expand the depth of our solutions and services offerings for our clients, specifically in security, risk management, and data center transformation," the statement continued. "We look forward to combining the best of both companies in support of our commitment to the high quality delivery of customized solutions for our clients.”

The combined company would have 3,000 employees and annual revenues of $3.26 billion, according to a transaction analysis from M&A consultancy Martin Wolf.

“Additionally, the deal (will) strengthen Sirius' security practice,” the analysis states. “In light of increasing demand for security, the move is a smart play; not only is Forsythe one of the largest security integrators in North America, but also the two security practices will account for (about $510 million) combined.”

(UPDATED) Neither company publicly confirmed the merger amid leaked reports on Friday, but they issued a joint statement Monday.

“Forsythe remains committed to our clients and to delivering best-in-class IT solutions," Brennan said in the statement.

"Combining with Sirius allows us to expand our solutions and product offerings to best serve our long-standing customer base,” he said. “We are extremely impressed with the reputation and credibility Sirius has built in the IT industry, and look forward to the expanded capabilities we will be able to bring to our clients as a result of this acquisition.”

San Antonio, Texas-based Sirius is IBM’s largest U.S.-based VAR that works with large- and medium-sized businesses, Martin Wolf said.

The company also partners with VMware, Hewlett Packard Enterprise, Intel, Cisco, Microsoft, Trend Micro and Amazon Web Services.

Partnerships of the more security-focused Forsythe include names like IBM, Dell, VMware, HPE, Symantec, Cisco, Citrix, NetApp and maybe most importantly for purposes of this deal, Oracle.

A key consideration for Sirius was the ability to leverage Forsythe’s partnership with Oracle to diversify and reduce its reliance on IBM’s business fortunes, according to the unnamed source who spoke to CRN.

Currently, more than 52 percent of Sirius’ revenue comes from selling IBM products and services, Martin Wolf said.

Forsythe, headquartered in Skokie, Ill., has been continuously profitable for 46 years and is 100-percent owned by its employees.

Both companies have been active M&A participants.

Fueled by private equity dollars, Sirius has made three acquisitions since September of 2015, while Forsythe has purchased 10 companies since 2001, according to Martin Wolf.

 

Editor's Note: This story was updated after publication to include comments from Sirius and Forsythe Technology.

 

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