MSP Merger: Coronavirus No Obstacle To Datapath’s Bright Bear Buy
CRN report on Datapath closing its acquisition of Bright Bear Technology Solutions during the pandemic, with Nathan Phinney describing the remote deal and Bright Bear's focus on financial services and SOC 2.
By Joseph F. Kovar, CRN (Running Your Business), July 13, 2020 (8:33 AM EDT). A news report and interview; Datapath CEO David Darmstandler is quoted at length and Nathan is quoted directly.
Title as printed: “MSP Merger: Coronavirus No Obstacle To Datapath’s Bright Bear Buy”. CRN printed Nathan’s title as “Bright Bear President Nathan Phinney” and “Nathan Phinney, Bright Bear president and now Datapath’s general manager for Southern California” (as printed by CRN).
What Nathan said
“We’re relational people,” Phinney told CRN. “We’re in sales. I would have loved to have driven up to meet them. They did spend a week in our office, sequestered with masks and hand sanitizers. We told our team about the deal via a Zoom meeting.”
“Everything was signed via DocuSign,” he said. “The experience was weird. I thought there would be a lot more fanfare and passing the pens around. Instead, it was, ‘click here’ and done. It was safer.”
“He sent the document to me,” he said. “I sent it to my partner. The broker then sent the document to David and James. I did a lot of refreshing the screen to see if everyone clicked. It was strange. I was sitting in my office refreshing the browser to see if my company was sold. At this point we hadn’t told our people about the deal. I heard people knocking on the door looking for me. I had to tell them I was doing something else.”
“We both had an emphasis on security,” he said. “Datapath had more of a focus in government and education. It made sense to put the two together. We’re big in some competencies they didn’t focus on before, and vice versa. Datapath is now the fastest-growing MSP in California, and may now be the largest MSP in the state.”
CRN reported: It was tough to not spend a lot of time face-to-face to discuss the deal, said Nathan Phinney.
CRN reported: There was no face-to-face meeting to sign the final documents, Phinney said.
CRN reported: Phinney said Bright Bear had a strong focus in financial services companies, especially with escrow firms, and had its own SOC 2 certification, which he said is unusual for a company of its size.
Key facts
- “Datapath has closed its acquisition of Irvine, Calif.-based Bright Bear Technology Solutions, ending a year-long journey that, because of the pandemic, saw most of the negotiations being done via Zoom meetings and the final contract signed via DocuSign.”
- “The acquisition closed July 1. No dollar value was given for the acquisition.”
- Darmstandler, his partner and COO James Bates, and Phinney started talking about a year earlier after a third-party consultant introduced the two companies, Darmstandler told CRN.
- “Bright Bear was the company’s second acquisition.”
- Per Darmstandler, Datapath is “primarily a Microsoft Azure shop, and Bright Bear works primarily with Amazon Web Services.”