Blue Mantis Gains Growth Boost from Recognize Private Equity

Earlier in September, security-focused MSP Blue Mantis announced that private equity group Recognize had acquired a majority stake in the company’s investment ownership, joining another firm, Abry Partners, in the funding structure behind the services provider.

“Our team is completely aligned with Recognize on key strategic imperatives to unlock value in the next chapter of our growth. Blue Mantis is an acknowledged industry leader with a track record of consistent growth and a well-earned reputation as a trusted advisor to clients requiring guidance in navigating rapid market shifts,” said CEO Josh Dinneen in a press release. “With our new partners at Recognize, we look forward to capitalizing on growing demand from clients for our expanding portfolio of managed services, cybersecurity and cloud offerings.”

Blue Mantis is no stranger to private equity, but looks to further growth with Recognize

Blue Mantis services mid-market and enterprise clients throughout North America with a focus across multiple vertical markets, including business services, healthcare, financial services, manufacturing, and the public sector.

The infusion of private equity backing is nothing new for Blue Mantis; Abry Partners was the majority investment in the provider until this new deal with Recognize. Abry Partners first invested in Blue Mantis in 2020. Terry Richardson, chief revenue officer at Blue Mantis, said this experience will help the process of working with the Recognize team go smoothly.

“It’s an evolution of our business model and strategy, not a revolutionary change. As important, we decided to partner with Recognize at a time when we occupy a position of strength,” said Richardson.

Richardson said Blue Mantis is now able to further deepen its focus areas across managed IT services, cybersecurity, and cloud technology. He pointed to the organization’s financial capital through equity as a key enabler in their growth to date.

“We’ve been able to attract and retain some of the industry’s top talent at the executive level, as well as in the all-important technical and client-facing roles. We have increased our headcount overall by a considerable number, more than doubling during that time,” said Richardson. “We have also expanded our footprint along the Eastern Seaboard, expanded into Canada, added offshore capabilities in India, and we’ve made several acquisitions to help us expand and/or deepen our practice areas.”

Looking forward, the Blue Mantis team believes it is in a stronger position to extend its focus and reach more customers, but Richardson noted that growth needed to have a strategic purpose behind it.

“We will measure success with our partner Recognize through the continued execution of our go-to-market strategy and growth with strategic partners. We will further expand our presence and market share across all eight practice areas and geographically. But it will not be growth for growth’s sake,” Richardson said.

As M&A and private equity investment demand increases, service providers need to look to the future

Richardson’s comments echo wider trends in the channel, as organizations continue to pursue M&A and private equity investments to grow larger, sometimes through acquiring smaller service providers. Over the last several years, channel businesses have seen an increased interest from private equity firms as the IT channel becomes more profitable and appealing to firms looking to enter the space.

Recognize itself is led by several executives with deep experience in tech and managed services, but even to firms without that experience, service providers are a popular target for investment if they are established in a few key areas.

“Recognize, like Abry Partners previously, realized the growth potential we are capable of, and frankly, they wanted to be a part of it. They liked our leadership team, messaging, size and partner ecosystem, as well as the growth rate and market momentum we’ve been generating over the past few years,” said Richardson.

Service providers looking to cash in on private equity interest or the ongoing M&A spree should consider what they want to grow in, and how they can best achieve that growth while maintaining their current performance. 

“Anything we accomplish truly starts and ends with our client base. We will remain focused on delivering positive business outcomes for these clients, and everything else will follow.”

M&A activity is also heating up in the APAC region, including an acquisition in August which bolstered security capabilities at Spirit Technologies.