A Portland-based company that provides information technology services to small and midsize businesses says it has a strategy to become a national player in a quickly consolidating industry.

The company, formerly known as Winxnet, changed its name to Logically in April after acquiring a San Diego firm in 2018. Logically announced another acquisition Thursday and said it plans to pursue three to four such deals each year to keep pace with the growth of major competitors.

Logically CEO Chris Claudio said the company’s acquisition of Sullivan Data Management, a provider of IT services based in Yorktown Heights, New York, is part of a larger strategy to expand nationally while adding to Logically’s strong presence in the Northeast.

Claudio said the IT services industry, also known as managed services, is still relatively fragmented with 15,000 to 25,000 small to midsize providers scattered throughout the United States.

He said, however, that there has been a push lately toward industry consolidation, and that Logically wants to be one of the firms that comes out on top.

“We’ve got a fairly ambitious strategy over the next three to five years here to grow to a certain size and scale,” Claudio said. “Half of that’s going to be done through organic growth; half of that’s going to be done through (mergers and acquisitions).”

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The Sullivan acquisition was attractive to Logically because it expands the company into the greater New York area, and because Sullivan has a skilled team with similar values, he said. Claudio would not disclose the terms of the acquisition.

Adding Sullivan’s 10-person staff brings Logically’s workforce up to about 140, with 6o of those workers in Portland, he said. The company now has offices in Maine, Massachusetts, New York, Tennessee and California.

Claudio said his goal is to grow Logically into one of the managed services industry’s top 10 U.S. providers within the next five years. He declined to provide figures for the company’s 2018 revenue or its recent annual growth rate.

In 2017, the company, then Winxnet, reported revenues of $17 million, and appeared on the Inc. 5000 list for a fifth time.

“We think that we’re kind of on the leading edge of this (industry consolidation) where we’re looking to be one of those platform (managed services providers),” Claudio said. “I think there are about eight of us now throughout the country that have a national presence that are looking to add on and grow to a certain size and scale in order to get that magnitude of buying capacity, that magnitude of support capacity.”

The U.S. managed services industry generates about $67 billion annually and is growing at a healthy rate as technology becomes more complex, information security becomes more daunting, and a greater number of employers find it more manageable and affordable to outsource those responsibilities to a third party, he said.

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As a local example, the company cited Catholic Charities of Maine, which used to handle its own IT services in house until about five years ago, when there was a major IT problem and the entire organization went offline for about a week. That’s when it turned to Logically.

Catholic Charities CEO Steve Letourneau said in a statement that Logically made a number of positive changes such as enhancing security and moving IT systems to the internet-based “cloud” so they could be accessed from anywhere.

Claudio said that despite the challenges his company faces finding skilled IT workers in Portland, he is committed to keeping the city as Logically’s home base.

“We’re staying in Maine. We’re growing in Maine,” he said. “Our headquarters is going to be in Maine.”

 

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