Now, Core Business Technology Solutions has gone down the aisle again, tying the knot last month with White Plains, N.Y.-based Convergence Technologies Inc.-a deal that makes Indianapolis headquarters for a company with 270 employees and $105 million in revenue.
But, with apologies to Wynette, nobody at this wedding sang, “Stand by your LAN.” The good ol’ local area network is now just a slice of the increasingly diverse information-technology products and services Core offers small and midsize companies these days.
There’s a dizzying convergence of wireless phone service with video and the Internet that have spawned such animals as voice over Internet protocol, or VOIP.
Core founder and President Jeffrey A. Lackey said specializing in a few of those areas was not a winning strategy for long-term growth.
“All that [technology] is starting to come to a head. Companies are saying, ‘How do I take advantage of all of these?'”
Convergence purchased Core-one of the largest IT-consulting companies based in Indianapolis. But under the unusual terms of the deal, the merged company is adopting the Core moniker and making Core’s 14,000-square foot office at 201 W. 103rd St. the corporate headquarters. Lackey, 45, will serve as president and CEO.
“It’s his expertise. That’s the reason they wanted [Core]. They wanted Jeff,” said Curtis Miller, chairman of Indianapolis accounting firm Katz Sapper & Miller, where Core was spawned in the mid-1990s when the firm wanted to grow its services beyond accounting.
Before last month’s merger, Core ranked No. 335 on industry bible VARBusiness’ list of the nation’s 500 largest “value-added resellers.”
This genre consists of companies that provide technology such as computer and telecommunications infrastructure and integrate it to allow a workplace to function. Such firms, for example, might find the most cost-effective way for a company’s remote sales force to stay in touch with the home office-perhaps via VOIP or by using a BlackBerry wireless e-mail device.
With the merger, “I suppose that would take us into the top 100,” Lackey said.
Integrators like Core get roughly half their sales from consulting and the other half through the sale of equipment.
Among Core’s big customers are the nation’s largest publicly traded auto auction firm, Carmel-based Adesa Inc., and the Fishers operation of student loan giant Sallie Mae.
Core’s former competitor, Convergence Technologies, formed in part to acquire IT integrators. Convergence is owned partly by the New York-based privateequity firm Founders Equity, whose holdings include windshield replacement chain Glass America.
Helping fund the Core merger, and to provide growth capital, was Providence, R.I.-based Textron Financial Corp.
Overnight, Core’s annual revenue nearly doubled to $105 million, from about $60 million.
It’s gone from 90 employees in Indianapolis, and a handful of workers in three other states, to about 270 in five states.
“This gives us more skill, technical capacity and a broader geographical footprint,” Lackey said.
Already, he’s looking at new markets, wanting to set up shops in Boston, Chicago and Cleveland. Lackey said he’d like to add another $100 million to $150 million in revenue within 18 months.
Technology investment slowed in 2001, but now is on the upswing, and Lackey wanted to be positioned to capitalize. Service providers are most likely to see sales opportunities in Internet-related areas, including security, intranet development, online payment systems and in potentially cost-saving technologies such as VOIP, according to the most recent monthly forecast by CRN Research.
“The level of spending priority among small businesses for each of these categories is at or above the highest level in the past year,” CRN said.
“We’re starting to see companies reinvest in technology,” Lackey said. “Companies are recognizing they laid off their capital spending.”
Miller attributes Lackey’s success partly to his balance of experience in both the technical and sales sides of the technology business. Lackey was an Indiana University marketing graduate, initially working in the information-systems departments of several local companies. He later worked as vice president of professional services at The Future Now, a national computer reseller.
“He’s always been aware of and had a sensitivity to trends and changes,” Miller said.
It’s not the first time Lackey’s company has been acquired but left to operate in Indianapolis. Cincinnati Bell bought a majority stake in 1998. Although it established a branch office in Ohio, it left Lackey and the headquarters here. Lackey bought the business back in 2004 for an undisclosed price.