Last December (2025), AVANT received a second investor, Pamlico brought in Court Square Capital Partners. Today, Telarus announced a second investor, Snowhawk. The article by James Anderson in Channel Dive raises 3 questions.
- “Telarus CEO and Cofounder Adam Edwards will continue to lead the company alongside Chief Commercial Officer Richard Murray, and both will “retain substantial ownership stakes” in Telarus.” What happened to co-founder Patrick?!
- In 2020, “Edwards said leaders at Telarus and Columbia agreed that the market was primed for consolidation and put money toward that thesis.” Did that consolidation really happen? Telarus bought TelAdvocate (small) and TCG (Southeast medium). That wasn’t a lot of M&A compared to AppDirect, which bought Micrcorp, Acuity, CSNG and several others. Many – almost 300 – agencies grabbed an investment from Upstack, Amplix, Bluewave or Bridgepointe. The TSD space has Sandler, Bridgepointe, Intelisys, Telarus and Avant as the larger players. There are several regional players left. So how much consolidation actually happened for the $650-700M in investment dollars?
- “What Columbia does is bet on winners, and that’s what you’re seeing them do,” Edwards said. “Any time you maintain an investment, you’re making a decision.” This statement works unless you understand how Private Equity works.
Look at the history of Ingram Micro. Ingram was public, but acquired by HNA, a Chinese conglomerate that went bankrupt. Platinum Equity bought Ingram from HNA for $7B in 2020 (completed in July 2021). Took it to an IPO in October, 2024 (3 years!). Ingram just ran a second IPO, because PE still had too many shares. That’s the PE playbook. The other way is to package the asset for a roll-up sale to a larger PE firm. If there was some way for Columbia to exit, they would since they are on year #6!
Data indicates there are over 11,500 to 13,500+ private equity-backed or unsold companies within the U.S. alone, spanning sectors like consumer services (2,563+), healthcare (1,536+), industrial enterprises, and local businesses. According to HBR, private equity controls roughly 15% to 20% of the U.S. economy. “Since 2000, the private equity-backed company count climbed from about 2,000 U.S. companies to more than 11,500, a 400%+ increase. At the same time, the count of publicly-listed U.S. businesses on the NYSE or NASDAQ exchanges declined from roughly 7,000 to 4,500, shrinking the count by 35%.” [Citizens Bank]
Private Equity isn’t holding these businesses just to extract free cash flow; they don’t have an exit. Broadband build out and AI and data center construction are just two movements that are sucking up all the investment dollars in the US. There is a ton of M&A in the MSP, data center and ISP spaces. And again not many exits.
[PE also owns a lot of single family homes, but that’s another ugly issue.]
This will eventually lead to a rocky financial situation for our channel.
There was a time when Adam and Ian talked about being acquired by Big Consulting. No one saw that AI would disrupt that space. Accenture and others are in a fit as they shift from hourly billing to outcome billing at a time when they are questioning hiring. AI does what most junior employees were doing BUT if you don’t have juniors, you never have seniors. And seniors bill a lot! It is a problem.