GRAND RAPIDS ? The Iserv Co., which has aggressively been snapping up smaller Internet Service Providers, now has its sights set on acquiring distressed software and other technology companies. The company announced Wednesday that is had created the Iserv Technology Group to buy complementary technology companies in the Midwest.
CEO Vice Shepherd would not say how much cash has been stashed in his investment pool ? sources said it was a couple million dollars ? but he did say Iserv could lay its hands on $20 million for the right deals.
?We?re interested only in established technology companies, with a revenue stream and customer base,?? Shepherd said. ?We?re looking for entities that don?t have enough capital or management expertise to take it to the next level, or they don?t have enough cash to get a new product developed. You could call them under performing assets.?
You also could call them companies that might make a good fit with Iserv?s technology and management expertise. Iserv would take a majority position. Iserv has more than 50,000 ISP customers, most with dial-up connections.
?We?re looking for synergistic companies,?? Shepherd said. ?We could talk to some companies that could use our data center and ISP. We will look for great candidates with technologies that go hand-in-hand with ours.?
Iserv currently is in talks with several companies that hit its target – $100 million in annual revenues, although Shepherd said companies doing $10 million to $15 million a year would be considered. He said the candidates are software companies that have hit a wall and need more cash to continuing growing. He wouldn?t elaborate.
Shepherd will oversee the operation of ITG, along with Iserv Chief Financial Officer Mike Grinzinger and Iserv Vice President of Operations Jim Loznak. Shepherd, with Iserv since 2001, has extensive experience in acquisitions and organizational turnarounds, having done more than 20 transactions during his career. Prior to joining Iserv, Shepherd was CEO of Chicago-based Systems Software Associates, part of the international acquisition and management company the Gores Technology Group.
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