Midmarket IT solutions provider Presidio has acquired Red Sky Solutions, a managed security services provider (MSSP) that also offers multiple IT consulting services, for approximately $40.8 million in cash and stock, the companies have confirmed.
Presidio CEO Bob Cagnazzi briefly mentioned the buyout in an earnings release this week. "In early April, we acquired Red Sky Solutions, LLC, a fast growing solutions-driven company with a strong team that gives us an enhanced presence in the mountain states," Cagnazzi said. "This is consistent with our stated growth strategy of pursing complementary acquisitions. We are very excited to welcome the Red Sky team to Presidio."
Presidio paid $36.6 million paid in cash and approximately $4.2 million in 269,287 restricted shares of the company’s common stock, according to an SEC filing.
Managed Security and IT Consulting Services
On the one hand, Cagnazzi positioned the deal as a regional land grab since Red Sky is based on Salt Lake City, Utah. But on the other, the deal reinforces Presidio's continued push into the IT security services market.
The buyout addresses such areas as:
- Cybersecurity services like consulting/risk services, penetration testing, application security and vulnerability research.
- Managed services including SIEM, endpoint security, detection and response.
- And Red Sky Labs-Validated Products like advanced network, platform and cloud services. That effort includes numerous strategic alliances.
Red Sky, founded in 2004, has 2,500 global customers.
Presidio Security Revenues, Next Moves
Presidio already is a Top 100 MSSP. But the company's security revenues actually fell 5.9 percent to $83.9 million in the company's just-completed Q3 2018 fiscal results.
During the third quarter, Presidio "experienced strong demand for Security solutions in the form of client orders, but delays in delivering these solutions resulted in lower revenue recognition which drove the decline in Security revenue as compared to the prior year period," the company said.
Still, Red Sky should provide an even brighter spotlight for Presidio. The company is set to host Red Sky Security Conference 2018 next week in Utah.