Now under the umbrella of Chicago private equity firm High Street Capital LLC, NeoSystems Corp. founder, President and CEO Michael Tinsley is ready to do some shopping of his own.
The Tysons professional services and IT provider sold a majority of its company to High Street Capital earlier this month for an undisclosed sum.
Tinsley told the Washington Business Journal shortly after the purchase that the deal will help NeoSystems not only scale its back office, compliance and managed services offerings, it will also provide them with the opportunity to scout some M&A activity.
“We really want to become acquisitive,” he said. “We’ve never been in a position to make any sort of sizable acquisitions, and with our services offerings being at the point that they are and ready to scale, then we really are interested in making some strategic acquisitions in the coming years. And High Street is eager to support us in that endeavor.”
NeoSystems has been no stranger when in comes to increasing its size. Over the past 18 years, the firm has been recognized by the Washington Business Journal as one of the largest LGBTQ-owned companies and largest accounting firms in Greater Washington, notching $44.51 million in annual revenue in 2020.
A provider of back-office capabilities like financial planning and analysis, accounting, human capital and professional services, the company also bolstered its IT offerings in 2013 with its acquisition of Herndon's MoCo IT Inc., which added to its IT infrastructure and software development services and helped with the company’s drive to offer more cloud-based managed services.
Tinsley said NeoSystems aims to build on gains made in those managed services offerings, as the ongoing pandemic has led to many companies looking for tools to help them maintain a remote work posture amidst continued uncertainty.
“Especially within the last couple of years with the situation around Covid and how that has forced companies into a sort of remote delivery of their work, we’ve seen an increase in the amount of functions that companies have been turning to outside parties to help with in terms of outsourcing,” he said, noting that cloud-enabled back office, IT management and cybersecurity functions have become increasingly in demand since the onset of the pandemic.
Another wrinkle driving that outsourcing market is the federal government’s focus on cybersecurity standards in the contracting sector, including the Department of Defense’s Cybersecurity Maturity Model Certification program, which are a new set of cybersecurity requirements for contractors themselves to fulfill before they can win certain DOD awards.
NeoSystems currently provides CMMC audit preparation and compliance services for contractors, as well as a managed cybersecurity service that companies can adopt to help strengthen their cyber defenses.
“That’s one of those areas that we are looking to make acquisitions, looking for companies that might be involved in some degree of cloud provisioning services or cybersecurity itself,” he said, while the company is also actively recruiting for talent focused in areas like cloud engineering and cybersecurity controls.
The growth potential for those offerings is part of what attracted High Street to acquire the company, Tinsley said, but he added the firm’s recognition of how NeoSystems has developed and its support have helped the potential for future scale.
“They understood our growth plans and supported them, and they were just eager to get involved with us and help us realize the growth objectives that we have going forward,” he said.
