Joe Quaglia, the newly named chief executive of IT consulting organization Trace3 says the company stands “in the middle of the IT ecosystem” with a client-focused mindset enabling AI, data, cloud, cybersecurity and digital transformation.
“As IT problems for our clients get more complex, they call upon us because they know we’ve got the engineering talent to deliver their business outcomes, to solve their most complex IT problems,” Quaglia said.
He spoke to the Business Journal on Nov. 4, the day after his appointment, and the company’s completed acquisition on Oct. 31 by Apollo Funds of New York was announced.
Trace3 declined to disclose the amount Apollo paid to acquire the company from American Securities. However, after the purchase was announced in August, business intelligence organization Octus cited sources stating that the price was $1.65 billion and that Trace3 generates approximately $180 million in annual adjusted profit.
Trace3’s 2025 revenue is expected to total around $3 billion, according to Quaglia, representing a 20% increase over 2023.
Quaglia, named president of Trace3 in 2022, succeeds Rich Fennessy, who has transitioned to the role of Trace3 executive chairman.
“Trace3’s been profitable since its inception,” Quaglia said, emphasizing the company is looking for even more growth under Apollo.
16th Largest Private Company
Trace3 was founded in 2002 by Hayes Drumwright, who had been diagnosed with cancer at the age of 21. Along with co-founder Bret MacInnes, they named the company Trace3, inspired by three generations of Drumwright’s family.
“As long as you have your health, there is little to fear in failure,” he once told the website startupgrind.com.
The company, which had steadily grown, was acquired in 2019 by American Securities, which helped its expansion through strategic acquisitions.
Trace3 is the 16th largest privately held company in Orange County on this year’s Business Journal rankings, and it ranks No. 3 among privately held tech companies, following computer memory products maker Kingston Technology and IT services provider UST.
Quaglia says the company now has about 1,500 employees, up from approximately 1,210 in 2022.
The company was advertising for more than 70 positions as of Nov. 4, ranging from senior consultant in Irvine to IT support specialist in Michigan, solution architect
networking/network security in New Jersey and systems engineer in Alabama.
The company now has 4,500 clients, including many Fortune 500 companies.
Trace3 has established an international position in the technology solutions provider space with expertise in artificial intelligence, cloud, security, data and analytics, managed services, data center infrastructure and emerging technology.
The company’s slogan on its website is “All possibilities live in AI – All possibilities live in technology.”
“We see a meaningful opportunity to support Trace3’s efforts to meet AI-related demand across their client base and expand high-value service offerings while pursuing strategic M&A to help accelerate the company’s growth trajectory,” Apollo Partner Robert Kalsow-Ramos said in a statement.
“Trace3 is a recognized leader in enterprise IT, with a strong culture of innovation and a track record of delivering critical and cutting-edge products and services to its broad client base.”
The Apollo Funds is part of Apollo Global Management, which has $908 billion of assets under management. The company has a $77 billion market cap (NYSE: APO).
Acquisition Announced in August
Trace3 said the transaction fuels its new phase of growth, which is focused on expanded capabilities across emerging technologies, artificial intelligence, cloud, data and analytics, and cybersecurity.
Sandy Salty, the company’s chief marketing officer, shares the enthusiasm for Trace3’s future under Apollo Funds.
She said she’s “had the privilege of helping shape every chapter of Trace3’s journey, and the next one feels like the moment everything we’ve built was leading toward.”
“We are perfectly positioned to lead in this AI era and with the partnership of a world-class financial sponsor like Apollo, we’re entering a chapter where we will set a new industry standard for what a technology consulting partner can and should be for clients,” Salty told the Business Journal.
Trace3’s New CEO Emphasizes Company Culture
Joe Quaglia spoke to the Business Journal on Nov. 4, the day after his appointment as CEO of Trace3 was announced. Here are excerpts from the talk:
On Trace3 Employees:
“My first responsibility is to be sure we preserve and enhance our culture. We have about 1,500 teammates. In our most recent employee engagement survey, we scored 8 points higher than the industry benchmark. The other key responsibility is to set the next level vision, strategy and direction for Trace3.”
On Clients:
“We want to always continue to inspire a client-focused mindset across Trace3.”
The company wants to “ensure that we deliver consistent, predictable market-leading growth.”
“We serve about 4,500 clients across all 50 states in the U.S.”
On Company Mission:
“Trace3 is an IT services and solutions provider, serving the enterprise mid-market and government clients. We deliver business transformation services for our clients. Basically, we consult, integrate, and operate a convergence of technologies across data, security, and cloud to drive measurable value for our clients. We’re in the middle of the IT ecosystem, trying to simplify what has ultimately become very, very complex when you’re dealing with security platforms, data platforms, cloud platforms.”
“As IT problems for our clients get more complex, they call upon us because they know we’ve got the engineering talent to deliver their business outcomes, to solve their most complex IT problems.”
“Apollo brings us fresh ideas, investments, capital as we continue to grow the business as we have under the American Securities ownership.”
On Future M&A Deals:
Trace3 is “always acquisitive.”
“There is always a pipeline of opportunities.”
