May 1-7, 2020 I Vol. 21 No. 7 I By Henry Dubroff, Editor
Ever the contrarian, Saalex founder and CEO Travis Mack has taken a bold step toward transforming his flagship company with an acquisition.
On April 23, Saalex Information Technology, a division of Camarillo-based Saalex Corp., announced the acquisition of Scottsdale, Ariz.-based managed service provider Valeo Networks.
Financial terms were not released but Mack told the Business Times the deal would be accretive to revenue and profits.
The acquisition will combine two managed service providers in SaalexIT’s Southwest region and enable SaalexIT to scale by leveraging the automation expertise and engineering resources that Valeo Networks brings to the table, an April 23 news release said.
The Valeo Networks brand will remain and the company will keep its Scottsdale office, the statement said.
“The acquisition of Valeo Networks will further enhance our nationwide capabilities and strengthen our skill sets in the areas of cloud services, cybersecurity, engineering, network securities, and managed IT services,” Mack said in the statement.
Mack, a Navy veteran, founded Saalex 20 years ago and named it after his two children. He grew the company, in part, with financial help from U.S. Small Business Administration loans and graduated from its Section 7(a) programs designed to support minority entrepreneurs. He is a previous winner of the Business Times Spirit of Small Business award.
During a phone interview with the Business Times, Mack said he’s been “saving our balance sheet for opportunities that will be beneficial in the long term.”
Saalex, which started out as a contractor that specialized in managing Department of Defense installations, has been expanding its footprint into commercial markets. It has been effective in using digital marketing tools to reach and retain clients but it also retains significant business managing military installations at the China Lake Naval Weapons Station and elsewhere.
In the wake of the coronavirus pandemic, he said “business changing and IT companies have become long-term players,” with clients seeking new capabilities in cloud services and cyber security.
He said the industry still consists of dozens of independent organizations with $5 million to $15 million in revenue and 20 to 500 people — one that is ripe for consolidation.
He said his company is specializing in two different vertical markets, the commercial sector as well as state and local government agencies.
“There is a huge influx of customers coming after us to set up offices for teleworking,” he said. “We had to stop doing other projects so we had enough bandwidth” to manage the new demand for cloud services and teleworking, which often go hand in hand.
He said he’s expecting to see more small, local operations look for an exit and he said he expects “a lot of deal flow.”
Coronavirus has disrupted many companies but so far Saalex has seen a competitive advantage in the chaos.
“Everybody else is running away from the fire, but we’re running into it with a flame-proof suit, boots and a helmet.”