After avoiding the M&A market for nearly three years, CEO Kevin Lynch says the security solution provider is in acquisition talks with a number of companies.
Since becoming CEO of Optiv in April 2020, Kevin Lynch says he’s deliberately stayed away from acquisitions because he wanted to focus on organizing and growing his firm organically into a stable and top cyber-advisor and solution provider.
“The early days were around understanding our strategy and ratifying our strategy,” said Lynch. “We have not been acquisitive in my first two years and eight months . I purposely avoided doing (acquisitions).”
But that’s about to change in 2023.
Lynch, who says Denver-based Optiv has recently grown into the largest pure-play security solutions provider in the world, says his firm is now in talks to buy other firms, as part of a shift in Optiv’s growth strategy moving forward.
“We’ve got several transactions that are at various stages of maturity, one in particular that’s quite mature,” Lynch told CRN in a recent interview. “You will see us bolt things (down) in the coming 12 months. We think we’re ready. It’s a great time for us to scale.”
He declined to say what companies Optiv, which is majority owned by private equity powerhouse KKR, is eyeing for takeovers.
But he said Optiv, which employs 2,400 people and has nearly 5,000 clients, is looking at a number of channel players, such as MSPs and consulting companies.
Optiv is interested in firms with the technical skills and capabilities that match Optiv’s needs, as well as firms specializing in industries where Optiv can further grow, Lynch said.
The firm is also eyeing geographic expansions in Europe and the Asian/Pacific areas. Lynch indicated his firm is looking especially close at possible expansion in Europe.
“We’ve looked at a lot of different markets and we’ve looked at a lot of different areas of growth and expansion for us,” he said, noting he’s closely consulted with Optiv’s investors and others about the firm’s shift to a new acquisition strategy.
“Whether it’s two, six, eight or more (acquisitions), our focus will be on the best deployment of our capital for the best return,” he said.
Lynch’s disclosure of his firm’s coming acquisition push came during a wide-ranging interview with CRN.
As for the economy heading into 2023, Lynch said he’s going under the assumption that there will continue to be uncertainties ahead – but he still expects general growth.
“We’re forecasting that the environment doesn’t change a whole lot, at least with respect to the first half of ’23,” he said.
He said he expects Optiv to expand its payroll by about 10 percent in 2023, matching its pace of hiring in 2022, even though the competition for top talent remains intense.
The current economy is one of the most perplexing he’s ever seen, said Lynch.
On one hand, the labor market is still tight and many companies continue to hire. Then again, some firms are starting to reduce their workforces, inflation is high, and many observers are worried about a potential recession, he said.
“We been in perhaps one of the longest moments of uncertainty facing the corporate environment that maybe I‘ve ever seen,” Lynch said.