Synoptek LLC’s recent acquisition of Indusa places the information technology service provider at the doorstep of $100 million in annual revenue while boosting its Microsoft Corp. offerings and related consulting work.
Irvine-based Synoptek employs what’s known as an up-the-stack strategy, essentially providing services steeped in applications its customers sell to others.
“This acquisition clearly had that in mind,” Vice President of Sales and Marketing Mike Bank told the Business Journal. “This positions us to not only have superior IT operational and leadership abilities but now more business transformation and innovative capabilities for the marketplace.”
Synoptek provides help desk support, cloud hosting advice, disaster-recovery and project-management services, among others. Chicago-based Indusa, which has a sizeable presence in India, specializes in software development and business and artificial intelligence.
Indusa’s employment base of about 230 and its management team will be retained by Synoptek, which also gains a key operational base in Chicago, one of the country’s chief financial and trading centers.
“We have an office there now, so we feel like we can be even stronger,” Bank said.
Synoptek employs about 430 people, 50 of them in Irvine. Last year, it expanded the Irvine headquarters and offices in Marlboro, Mass. and Rochester, N.Y.
The combined company has more than 1,500 customers.
The buy should boost annual revenue to about $90 million, according to Bank.
Synoptek was ranked on last year’s Business Journal’s annual list of fastest-growing private companies in Orange County. It placed No. 31 among midsize firms with a 69% revenue increase over two years to $75.2 million for the trailing 12 months ended June 30 of last year.
More than 90% of the combined business is domestic, though Synoptek has made strides in Canada.
“That’s been a very good market for us just recently,” Bank said.
The company has seen strong demand from the healthcare, retail, media, high-tech and financial services industries, he said. It’s also benefited from the ongoing global trend of mergers and acquisitions, and increased vigilance over security and privacy.
Synoptek’s first big growth spurt came in early 2016, when it acquired Earthlink Holdings Corp.’s IT business for $29 million.
The Atlanta-based acquisition, which brought more than 200 workers and about $37 million in annual revenue, nearly doubled the company’s business and employment.
Synoptek is a portfolio company of San Francisco private-equity firm Sverica Capital Management LLC, which acquired the IT services provider in 2015 on undisclosed terms.
Sverica has raised more than $700 million in equity capital over four funds. The Synoptek buy was its first from Fund IV.
Synoptek was established in 2001 by Tim Britt, former chief information officer of Ace Hardware Corp.’s online store. He currently serves as chief executive.
The company has long been backed by Newport Beach-based Toba Capital, OC’s largest venture capital firm. In July, the Business Journal reported Toba’s fund had exceeded $1 billion and invested in over 75 companies, with new areas of emphasis including e-commerce, direct-to-consumer, fintech, and consumer packaged goods.
Billionaire Vinny Smith launched the investment firm in 2012 after netting nearly $1 billion when his Quest Software was sold to Dell for $2.4 billion.
