CenterGate Capital has acquired Cartridge Technologies (CTI), a provider of managed print services to United States federal government agencies, from Broadtree Partners.
Through numerous service programs, CTI specializes in managing and servicing copiers, multi-function devices, laser printers and fax machines. The company serves as a single source for maintenance to all brands of office equipment including, among many others, Xerox, Toshiba, Canon, Lexmark, HP, Sharp, Brother, and Ricoh.
CTI is a prime contractor to the US government and directly enters contracts with federal, state, or local government agencies. Prime contractors are responsible for fulfilling the contract’s requirements, including project management, quality assurance, and, in some cases, subcontracting with other vendors or suppliers.
Broadtree acquired CTI in July 2020, and during its hold period CTI grew its revenue by more than 2.5x, expanded its headcount by 35%, and increased its number of devices under management by 80%.
“We are proud to have partnered with the CTI founders and team on what has been an incredibly successful chapter in CTI’s history,” said Brad Batten, a managing partner at Broadtree. “Colin Murphy’s leadership and the strength of the CTI team have carried forward the founders’ legacy and propelled the business to achieve great things.”
CTI was founded in 1990 by Ana Maria Castro and over its 33-year history, the Rockville, Maryland-headquartered company has developed specific expertise in providing managed print services to federal agencies. Today, CTI services more than 200 customers including many well-known agencies in the US government such as the US Army, the US Environmental Protection Agency, the US Department of Health & Human Services, and the US Department of Commerce.
CTI is registered with System for Award Management (SAM), a government-wide database and web portal managed by the U.S. General Services Administration (GSA) that consolidates federal procurement systems into one integrated system. SAM is the primary platform for vendors and contractors who want to do business with the federal government.
CTI is also listed on numerous GSA purchasing schedules. When a company negotiates and secures a contract with the GSA, they are added to the schedule, and their products or services then become available for purchase by all government agencies. This allows government agencies to buy from CTI under the terms and conditions negotiated in the GSA schedule contract.
“I am proud of what the CTI team has been able to accomplish as one of the premier managed print service providers to the federal government,” said CEO Colin Murphy, who will continue to lead CTI in partnership with CenterGate. “We are excited to partner with CenterGate in our next phase of growth. CenterGate’s investment will provide us with the capital and strategic resources to continue our growth trajectory while increasing productivity for our customers.”
“Colin and the CTI team have grown the company by providing an innovative, technology-enabled service to its customers who require the highest levels of service and security,” said Tim Liu, a managing director at CenterGate. “We are excited to partner with CTI to help them continue the execution of their growth plan.”
Austin-based CenterGate invests from $10 million to $75 million in equity in North America-based lower middle-market companies that have from $5 million to $30 million of EBITDA. Sectors of interest include business services, manufacturing and consumer. In August, CenterGate held a final and above target closing of CenterGate Capital Partners II LP with just over $375 million of capital.
The buy of CTI follows CenterGates’s August buy of Poseidon Barge, an Indiana-based manufacturer of sectional barges that are used in marine infrastructure applications including bridge rehabilitation, dam maintenance, and waterway dredging. Since its founding in 2014, CenterGate has now completed 14 platform investments, 18 add-on acquisitions, and has grown to a team of over 20 people.
Broadtree Partners makes majority investments across a range of industries in privately held and United States-based companies that have up to $75 million in revenue, up to $10 million in EBITDA, and at least 10% EBITDA margins. The firm was founded in 2016 by Managing Partner David Slenzak and is based in Charlotte, North Carolina.
DC Advisory was the financial advisor to CTI on this transaction.
© 2023 Private Equity Professional | November 1, 2023
