Bunker Hill Capital has sold Taos Mountain, an IT managed services provider, to IBM.
San Jose-based Taos provides multi-cloud cloud consulting and managed services to North America-based companies that are active in the technology, financial services, healthcare, retail, transportation and education sectors.
Taos, led by CEO Hamilton Yu, specializes in public cloud technologies and has working partnerships with Amazon Web Services, Google Cloud Platform, and Microsoft Azure. Customers of the company, among many others, include Netflix and Dell. According to IBM, Taos is one of the largest public cloud consulting and managed services firms in North America.
The public cloud includes computing services provided by third-parties over the public Internet, making them available to anyone who wants to use or purchase them. Unlike private clouds, public clouds save companies the cost of purchasing, managing, and maintaining on-premises hardware and application infrastructure. In addition, public clouds can be deployed faster than on-premise infrastructures and have an almost infinitely scalable platform. Cloud service providers, like Taos, are responsible for the management and maintenance of the system.
IBM has been actively investing in the multi-cloud IT services sector. According to IT industry analysts Gartner and IDC, the market for cloud professional services is estimated to exceed $200 billion by 2024.
In January 2021, IBM acquired Milwaukee-based IT services consulting firm 7Summits from Sverica Capital and, one month earlier in December 2020, IBM announced the acquisition of Helsinki-based cloud consulting services provider Nordcloud.
“Taos adds the deep expertise, public cloud partnerships and innovative solutions needed to drive growth and adoption of IBM’s hybrid cloud platform throughout the Americas,” said John Granger, a senior vice president at IBM. “The platform gives enterprises the freedom to choose from multiple providers to best meet their business and IT needs, and we are committed to helping our clients successfully navigate their open hybrid cloud journeys with those providers.”
Bunker Hill acquired Taos in August 2015 and was joined in the transaction with equity, senior debt and subordinated debt financing from co-founder Ric Urrutia, Abacus Finance Group, GMB Capital Partners, and Brookside Mezzanine Partners.
“From the day we closed, we have had a great working relationship with the Taos team,” said Rufus Clark, a managing partner at Bunker Hill. “Ric Urrutia was a true partner from day one as we worked together to develop and execute on a strategic plan. Hiring Hamilton Yu to lead the transformation of Taos from primarily on-premise to multi-Cloud and hybrid was a critical decision.”
“Back in 2015, rolling a significant amount of equity and committing to taking Taos to the next level was my primary objective,” said Mr. Urrutia. “Picking the right strategic partner was the single most important decision to make and Bunker Hill stood out amongst their peers on all fronts. Under Bunker Hill’s leadership, we developed a multi-year strategic plan to expand the company’s capabilities from primarily on-premise infrastructure to multi-cloud and hybrid. The transformational journey Taos has gone through these past five years has been nothing short of amazing, culminating in this acquisition by IBM. The Bunker Hill team lived up to my expectations and without them this could not have happened.”
Boston-based Bunker Hill makes control investments in companies with enterprise values up to $150 million. Sectors of interest include including industrial products, business services and consumer products.
Barclays Capital was the financial advisor to Bunker Hill Capital and Taos on this transaction.
© 2021 Private Equity Professional | February 18, 2021
KKR has agreed to acquire Flow Control Group (FCG) from Bertram Capital. FCG is a distributor of flow control and industrial automation products,
Charlotte-based 
“We are fortunate to have had the opportunity to partner with FCG, under the exceptional leadership of David Patterson, to achieve our shared vision of creating a leading independent player in the industry,” said Kevin Yamashita, a partner at Bertram Capital. “Working closely with the FCG team, we exceeded our growth plan through strategic add-on acquisitions, organic growth initiatives, the addition of key executive talent, and operational improvement.”
“Flow Control Group stands out for their proven ability to be a strategic partner and consultative, technical resource for customers’ critical flow control and industrial automation product needs,” said Josh Weisenbeck, a partner at KKR. “We are excited to work together with David Patterson and the entire team at Flow Control Group to further expand the company’s reach while remaining an excellent partner to their OEM suppliers and continuing to be a value-added team member for their customers.”
After being buffeted by two COVID-19 shocked quarters in the middle of 2020, middle-market M&A managed to ride the wave in the fourth quarter, closing with a burst of productive activity, according to GF Data’s just- released year-end report.
“The story of the December quarter is a story about volume, reflecting varying measures of pent-up seller interest, normalizing financial results, and business models validated or enhanced by the extraordinary demands of last year,” said Andrew Greenberg, the CEO of GF Data.
“Total debt also continued to edge up toward pre-pandemic levels, coming in at 3.8x in Q4 – just below the 3.9x to 4.1x range we saw in prior years,” said B. Graeme Frazier, IV, GF Data’s co-founder and principal. However, after lagging for an added quarter, senior debt popped up to 3.2x.”
“The recovery of deal activity in the later part of Q3 and then in Q4 was remarkable,” said Chris Godwin, a managing director at Gen Cap America. “Like many others, with the bounce back in the market heading into the fourth quarter, we remained busy through the end of the year. Our team is seeing encouraging signs that this momentum will continue in 2021.”
Novacap has closed Novacap TMT VI LP (Nova VI) with just over $1.8 billion of capital. The new fund is the largest ever raised by Novacap. Nova VI was significantly oversubscribed and beat its target of $1 billion.
“We are extremely gratified for the opportunity to partner with such a prominent group of investors from around the globe,” said Pascal Tremblay, the president, CEO and managing partner of Novacap. “The successful closing of Nova VI continues the strong momentum in all our verticals including technology, media, and telecommunications; industries; and financial services. The Novacap franchise has never been stronger, and we are grateful for this momentum as we enter our fifth decade. Just as we have done throughout our history, Nova VI will seek to invest in growing, market-leading businesses led by talented entrepreneurs seeking a value-added partner to accelerate growth.”
