Grade A-plus: Ottawa IT firm boosts U.S. presence with acquisition of Michigan company

Mat and Allan
Mat and Allan

An IT firm with a major Ottawa footprint and big ambitions of expanding across North America has further bolstered its presence south of the border after its second M&A deal in less than six months. 

Convergence Networks/Grade A said Wednesday it’s finalized the acquisition of Application Specialist Kompany, a 34-person managed IT services and cybersecurity firm based in Lansing, Mich. Financial terms of the agreement were not disclosed.

The deal comes hot on the heels of Ottawa-based Grade A’s merger with Oregon’s Convergence Networks last December. Boston-based private equity firm Riverside Partners is the majority shareholder in the combined firm, which is officially incorporated in the U.S. and has its Canadian headquarters in Ottawa and its U.S. head office in Portland.

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Convergence Networks/Grade A chief executive Mat Lafrance, who helped launch Grade A nearly two decades ago, said executives of the three companies are longtime friends and started talking casually about joining forces several years ago. 

When Convergence and Grade A finally pulled the trigger on their merger, they knew it was only a matter of time before ASK came on board, Lafrance said.

“It’s just amazing to see it happening today,” he told OBJ on Wednesday. “If it were easy, we would have brought everybody together at the same time. But we knew bringing two companies (together) was challenging enough, so ASK was a natural fit to come in right afterwards.”

‘A lot of opportunity’

ASK’s employees will remain based in Lansing, and CEO Mike Maddox will join the Converge/Grade A executive team. 

The growing firm now has a combined headcount of about 160 at its three locations, including about 90 in Ottawa. Lafrance said he expects the company to reach 200 employees before the year is out as it ramps up hiring in a bid to blunt the growing tidal wave of cyber-threats.

“There’s a lot of opportunity, a lot of (tail)winds behind us pushing us forward,” he said. “We’re banking on the fact that there’s going to be a lot of growth in our industry, and we need people.”

ASK’s Maddox said the three operations complement each other. 

He explained that while Converge is a market leader in cybersecurity certification and compliance, his firm has been a trailblazer in rolling out cutting-edge solutions aimed at halting bad actors in their tracks.

“It’s like puzzle pieces that fit together perfectly,” Maddox said, noting the firms see eye-to-eye on market strategy, have similar office cultures and just generally mesh well together.

“I couldn’t pick two other companies that I would want to work with more than Convergence and Grade A,” he added. “It was such a natural fit.”

Maddox said cyber attacks lead to billions of dollars worth of losses for North American businesses every year, adding many companies are still “way behind where they need to be when it comes to cybersecurity.”

He noted that Convergence, Grade A and ASK already share several customers and said the combined firm can now offer a more well-rounded overall suite of services to clients, many of which are SMEs with fewer than 200 employees.

“We wanted a company that was large enough and had the scale to bring all those types of solutions to businesses,” Maddox said. “That’s what this merger is about.”

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