Target Company Overview

Riata Capital Group ("Riata" or "RCG") announced the successful recapitalization of COEO Solutions ("COEO" or the "Company"), a prominent provider of advanced managed network and cloud collaboration solutions for small and mid-sized enterprises. Headquartered in Downers Grove, Illinois, COEO specializes in delivering tailored IT solutions that encompass a wide range of sectors, including healthcare, finance, manufacturing, business services, education, and government. Under the leadership of Founder and CEO Eric Wince and President Frank Ruffolo, COEO has established itself as a reliable partner for clients, attending to their unique infrastructure needs through state-of-the-art services like DIA, SD-WAN, SASE, managed voice, and UCaaS.

COEO primarily targets the "Forgotten 5,000"—a group of small to mid-sized enterprises that are often overlooked by major telecommunications carriers. These businesses require a dependable communications partner that can guarantee 100% network uptime and deliver exemplary onshore support. By adopting a customized approach to managed network and cloud services, COEO ensures that its clients can concentrate on their core competencies while benefiting from top-notch IT solutions and support.

Industry Overview

The managed network and cloud collaboration industry in the United States has experienced significant growth, driven by the rapid digital transformation of businesses looking to enhance their operational efficiency. A growing emphasis on remote work has pushed enterprises to invest in robust communication and IT infrastructure, further bolstering the demand for innovative managed services.

In Illinois, where COEO is based, the proliferation of technology companies and startups has created a conducive environment for the adoption of managed IT solutions. Businesses are increasingly recognizing the merits of outsourcing their IT needs to specialized providers, thereby allowing them to focus on strategic initiatives and customer engagement. This shift represents an enormous opportunity for companies like COEO, which are equipped to deliver tailored solutions to meet diverse client requirements.

Moreover, organizations are prioritizing cybersecurity, which has emerged as a critical concern within the managed services sector. As cyber threats become more sophisticated, businesses are seeking partners that can offer cutting-edge security measures within their IT infrastructure. Consequently, firms that provide comprehensive and secure managed services are positioned to thrive in this evolving landscape.

Additionally, the rise of cloud technology has transformed the way businesses operate, with more enterprises moving to hybrid or fully cloud-based environments. This trend underscores the relevance of companies like COEO that provide seamless integration of cloud solutions with existing IT frameworks. With the market anticipated to continue its upward trajectory, COEO is strategically positioned to capitalize on these favorable conditions.

Rationale Behind the Deal

The rationale behind Riata's investment in COEO stems from the Company's impressive growth potential and its established track record of serving mid-market clients. Riata recognizes that COEO’s focus on customized solutions addresses a significant market gap, allowing the Company to expand its footprint in an industry poised for substantial growth.

By partnering with Riata, COEO gains access to additional capital and strategic resources that will facilitate its expansion plans. This partnership not only supports organic growth but also positions COEO favorably for strategic add-on acquisitions that could further enhance its service offerings and market share.

Investor Profile

Riata Capital Group is a distinguished private equity investment firm based in Dallas that concentrates on partnering with experienced management teams to invest in successful privately held companies. With a focus on sectors like business services, consumer goods, and healthcare services, Riata has a proven history of fostering growth in their portfolio companies.

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