Konica Minolta Acquires MSP All Covered

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Konica Minolta has acquired managed IT services provider All Covered, taking a major step in its cultural and strategic shift from hardware to services. All Covered targets the small and midsize business (SMB) market and has revenues of roughly $60 million.

"Moving into the managed IT space really is a culmination of the direction our company is trying to head, " said Konica Minolta chief operating officer Rick Taylor. "That's a direction that allows us to really help customers with every aspect of the information technology systems in their offices."

Taylor cited All Covered's reputation in the managed IT services industry as a key driver behind the deal, noting its high rankings in organic Google search results as an indicator of brand strength. He said that Konica Minolta values the market for managed IT services for SMBs at roughly $18 billion annually, but that it is highly fragmented and lacks national vendors like Geek Squad and other firms that target consumers. All Covered's current operations span 21 offices. It's reach will expand considerably with newfound access to Konica Minolta's network of direct and dealer sales channels.

"What's exciting and visionary here is that we're not aware of anyone of the scale and size of Konica Minolta playing in this space," said Todd Croteau, president of All Covered. "This is really cutting edge."

Both the All Covered brand and its management team will be retained, with the company operating as a wholly owned subsidiary of Konica Minolta. Financial terms of the acquisition were not disclosed.

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"One of the quickest ways to enter markets in our opinion is to go and acquire the best, and we think with this acquisition of All Covered we've done that," Taylor said.

The deal will enable Konica Minolta to offer its hardware and other products -- such as its managed printing services -- to All Covered's current client base, while marketing All Covered's IT services to its 200,000 existing SMB customers. Executives said that the acquisition will be seamless for customers of both companies. An All Covered customer that adds multifunction peripheral (MFP) products from Konica Minolta to its service contract, for example, will be able to do so under a single agreement. Taylor noted that All Covered has not historically done much business in hardware sales.

Approximately two-thirds of All Covered's current revenue comes from customers on contracted monthly agreements, according to the company. Most are one-, two-, or three-year deals with auto-renewal clauses.

Taylor praised All Covered's high rate of customer retention as another reason that Konica Minolta pursued the deal, which follows high-profile acquisitions made earlier this week by Oracle and Dell.

All Covered's services range from on-site server and desktop management and support to cloud-based computing solutions.

Taylor identified companies with between five and 250 employees as the "sweet spot" of the SMB market. He said Konica Minolta and its new subsidiary will continue to focus on that segment, but that he also believes the services are scalable to larger organizations.