With the acquisition of Groundswell, they have created a new mid-tier company of the same name that integrates their two previous deals and sets the stage for more.
In just over seven months, George Batsakis and Jerad Speigel have gone from an initial partnership and private equity backer to closing three acquisitions and creating a new middle market player.
With the third transaction announced Tuesday, they have changed the name of their company from CollabraLink to Groundswell.
The new name comes from the moniker of their third acquisition, Groundswell Consulting Group.
It is all part of their long-term strategy to build a middle tier player that can deliver leading edge technologies to government customers, the two executives told me in an interview.
When asked about why buy Groundswell, Batsakis went back to the beginning to explain their strategy.
Batsakis is one of the executives who built 1901 Group and sold it to Leidos at the end of 2020, while Spiegel is the founder of Phase One and led it to be acquired by Accenture Federal Services in 2017.
The government market veterans first bought Telesto Group with the support of Washington Harbour Partners in December.
That was quickly followed by the purchase of CollabraLink Technologies in January. From there is the latest buy of Groundswell.
The result is a mid-tier company with about $100 million in revenue and skills around low-code/no-code application development, digital transformation and data science.
“When we were getting this started, we had a very deliberate thesis around the kind of company we wanted to build,” Batsakis said.
CollabraLink and Telesto brought digital transformation skills around human-centered design, agile and DevSecOps, intelligent automation, and artificial intelligence. The Groundswell piece brings a company focused on Appian, a low-code software development platform, to help federal customers modernize their applications.
“Groundswell brings a market leading capability,” Batsakis said. “So, this puts us in a different league.”
Groundswell’s capabilities coupled with the growing demand for Appian implementations gives the company in a leadership position in the market, Batsakis said. The firm will compete with much larger primes as well as being a partner to those companies.
“When we think about what the marketplace and what our clients really need, they need these technologies, they need the functional expertise and they need companies that can get things done,” Speigel said.
Batsakis said the growth of Appian in the federal market is analogous to the growth experienced by other commercial software companies such as ServiceNow.
There is one big difference: Appian is right in the federal government’s backyard with its headquarters in Tysons, Virginia.
“You don’t have to get on a plane and meet with these folks,” Batsakis said. “They are right around the corner and accessible.”
In addition to Groundswell’s expertise, Batsakis said the company also brings a formidable reputation for delivering as well as a customer-first culture that pairs well with CollabraLink.
With the acquisition of Groundswell, Batsakis and Speigel felt it was time to rebrand the company. Wwhile other options were discussed, Batsakis said “we really fell in love with the Groundswell name."
“You see these movements – cloud is one, platforms as a service is another, and you have low code and data and AI,” Speigel said. “It really is this kind of groundswell of energy toward solving problems and using certain types of technologies.”
Groundswell had a great culture as did CollabraLink and Telesto. The job ahead is bringing all of that together, the executives said.
“In the M&A world, we talk about a synergy equation of one-plus-one equals more than two, and after doing a dozen of these deals over my career and being acquired a few times too, it rarely happens that way,” Batsakis said.
“But we are treating this like a merger. We are trying to set this up for real synergy -- revenue synergy, culture synergy, growth synergy.”
Keeping the founders on board is an important element of that. Groundswell's founders Blake Templeman, Eric Grinnalds and Justin Watts will remain with the company as investors and operating executives.
“We're looking at other operators who care deeply about the people that they work with inside the business and the culture and taking that to market and being a meaningful place to work,” Speigel said.
The McLean Group acted as a financial advisor to Groundswell Consulting. Holland & Knight and Whiteford Taylor Preston were legal advisors to Washington Harbour and Groundswell Consulting, respectively.
More of my conversation with Batsakis and Speigel will be available in an upcoming episode of the Project 38 podcast where we dive deeper into the opportunity they see ahead and where they see themselves making more acquisitions.
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