GRAND RAPIDS — Sagestone Consulting will announce its acquisition by Bloomfield Hills-based NuSoft Solutions today, paving the way for a new growth period for two of Michigan’s strongest technology companies.
The resulting 250-employee company will represent the largest concentration of Microsoft Certified Professionals in Michigan, if not the Midwest, and have a strong voice in Redmond decisions.
With offices in Grand Rapids, Bloomfield Hills, Chicago, Cincinnati and Columbus, Ohio, the firm is projecting revenues in excess of $25 million in 2005, and expects to create 15 to 20 technology jobs in West Michigan during that time.
“We really expect this to be more than a one plus one equals two situation,” said NuSoft founder and CEO Dale Mansour. “We expect to have exponential growth as a result. We’re positioning ourselves as a combined entity to compete with very large-scale companies like the Dells and IBM Global Services on a global scale.”
One of West Michigan’s most respected and successful technology companies, Sagestone has been recognized as an industry leader in application development and transformational technology.
A Microsoft Gold Certified Partner, the firm has customized solutions for 20 of the region’s 25 largest companies, and earned numerous awards for applications for a variety of industries, including life sciences, education and financial systems. It was recently awarded Microsoft’s 2004 Innovation in Education award, and was nominated for ComputerWorld’s Application of the Year in the life sciences sector.
Founder and CEO Keith Brophy has been one of the region’s most active technology advocates, participating in community development through organizations such as The Right Place Inc. and the Grand Rapids Area Chamber of Commerce.
“I had been exploring different growth options for our company, such as venture capital, to help us start the next phase of our journey,” said the 2004 Ernst & Young Entrepreneur of the Year winner. “We had a high emphasis on a path that could keep us driving forward, that could keep our philosophy and integrity as well as our talent and branding.”
Sagestone needed an influx of capital to expand its services to include holistic technology solutions. The company had become renowned for its application development and transformational technology, but lacked the ability to meet clients’ infrastructure needs.
“We’ve had a steady growth, but we have not been able to historically offer the market a holistic approach,” he said. “But I really didn’t think there would be a partner out there that shared our unique philosophy and vision.”
Similar to the chain of events that led to Sagestone’s acquisition of InDepth Technology by bringing former InDepth principal and Microsoft’s 2004 Outstanding Regional Director and Sagestone chief strategy officer Kevin Schuler on board, Brophy met Mansour a year ago at a Microsoft conference. The two entrepreneurs took an interest in each other’s enterprises, realizing that their firms were philosophically mirror images, with each containing elements that could be integral to the other’s immediate growth.
Like Sagestone, NuSoft had survived and grown during the dot-com bust. The 10-year-old firm had averaged 70 percent growth each year until the bust, then maintained a 5 percent growth in 2001 and 25 percent in 2002. This year the firm projects a 40 percent growth rate.
Also a Microsoft Gold Certified Partner, NuSoft earned the 2004 Winning Customer Award at Microsoft’s World Wide Partner Conference.
NuSoft also possessed competencies within the transformational technology and development realms, but unlike Sagestone, had become an industry leader in infrastructure and networking services.
Following today’s acquisition, Sagestone will retain its identity for a 90-day period, then transition under the NuSoft Solutions identity. The West Michigan development center will remain, with an immediate expansion into infrastructure services. Initially using NuSoft personnel from the east side of the state, the firm plans to begin hiring local talent in early 2005.
NuSoft also intends to embark on a similar relationship and expansion in Ohio between NuSoft’s Cincinnati location and Sagestone’s Columbus office.
“We feel that the combination of these two companies is an excellent resource for our customers in this region,” said David Helmer, regional vice president for the SMS&P group at Microsoft. “NuSoft’s strength and solutions knowledge will no doubt continue to propel the company to new heights. The teaming of NuSoft and Sagestone creates one of the leading providers of IT services in the Midwest.”
NuSoft believes that the adoption of Sagestone will help it compete with the nation’s largest technology providers.
“We can compete on the very large projects with localized talent,” Mansour said. “We’re going to win more of those. We’re privately owned with talent that exceeds the largest organizations, we’re still scrappy and hungry, and we can beat them day in and day out on price.”
“We believe we’ll win on every level,” added Brophy.
NuSoft is still carrying momentum from a recent win over Compuware on a $6 million application deal, while Sagestone has trumpeted similar wins over IBM Global Services.
“Adaptable, technically sophisticated companies like Sagestone are the foundation of greater Grand Rapids’ resilient and growing economy,” said The Right Place President Birgit Klohs in a prepared statement. “Keith has been a tireless champion of the technology industry in West Michigan and an innovative business leader. We have been proud to work with Sagestone throughout its history and celebrate this latest success.”
Brophy will retain an equity share in the company, becoming a partner in NuSoft Solutions. Mansour will remain CEO, with Brophy as president.