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MTM Technologies Announces Sale and Recapitalization

martinwolf Transaction Analysis

Financial Information Not Disclosed

  • New Cash Investment: $7 million

Transaction Facts

  • MTM Technologies, Inc. (OTCPK:MTMC) announced Wednesday that it had been acquired on June 12 by Columbia Partners, LLC, an investor in MTM since 2005.
  • The transaction, which included MTM receiving a new cash investment of $7 million from Columbia, appears to largely serve as a consolidation of Columbia’s ownership that takes care of all existing stockholders.
  • As an over-the-counter stock, MTM has not announced financials for several years. However, when it did announce revenue, it experienced a dramatic rise and fall from $52 million in 2004 to $275 million in 2007 to $175 million in 2009. According to CRN’s Solution Provider 500 list, its expected 2013 revenue was $150 million.

A New Beginning in An Attractive Space

  • Good Opportunities: As a cloud and virtualization-focused IT Solution provider, MTM is in an attractive space. Cloud computing spending as a percentage of the US IT market is consistently growing, and if MTM can capture some of that growth it will bring in attractive returns for Columbia Partners.
  • Supply Chain Valuations Increasing: Supply Chain valuations have been increasing, and deal flow has been ticking up. This acquisition offers Columbia the chance for a new beginning, cleaning out the company’s financial structure and making it more appealing to investors, all in a good financial climate.
  • Abrupt Fall From Grace: MTM reached a maximum market capitalization of $92 million in March 2000, during the technology bubble. However, it fell as quickly as it rose up, remaining under $10 million until growing to a second height of $46 million in early 2006. This rally, while longer-lived than the one in 2000, gradually declined away as well before dropping under $1 million in Nov. 2008.
  • Founding Fathers: MTM was founded by Steve Rothman and Howard Pavony. Steve Rothman was one of the most recognized leaders of the industry in the 80s and 90s, and was very well regarded.
  • Second Time Around: This is the second rollup for MTM’s Chairman of the Board Jerry Poch, who at Pequot Ventures was responsible for putting together the rollup of Ameridata at a high valuation to GE Capital in 1996 at a high valuation.

For more information about this transaction, click here to read the press release. martinwolf was not the advisor in this transaction.

 

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