New State Capital Partners Acquires Majority Stake in Computer Data Source

New State Capital Partners LLC announced a significant investment in CDS (Computer Data Source), provider of enterprise data center third-party maintenance, focused on high-end storage.

CDS operates in over 50 countries and partners with technology service providers to deliver installation, implementation, support, training and data center administration services to end-users across a range of industries.

Terms of the transaction were not disclosed.

“For several years, we have been pursuing an investment thesis around IT life-cycle management, including third-party maintenance,” said John Beauclair, senior principal, New State Capital Partners. “After evaluating numerous opportunities in the space, we found all of the elements that we were looking for in CDS. They work with SMB’s through Fortune 100 businesses, helping them manage high-end storage needs while building strong relationships that deliver monthly recurring revenue. We look forward to growing and diversifying CDS’ service offerings and customer base through both organic opportunities and acquisitions. New State’s deep roster of executives and ability to deploy capital strategically allows us to fully support these growth initiatives.”

Jim McDivitt, Tom Vaisanen, John Hlinka and Michael McKee, all members of the senior management team, have invested in the company and will remain in their positions. Ron Wollner, CDS’ co-founder, has maintained an equity stake and will remain as a senior advisor to the board.

“CDS boasts an industry-leading senior management team with an average of 25 years of experience and a proven track record of strong execution, even through diverse economic conditions,” added Steve Larned, senior principal, New State Capital Partners. “They’re supported by fully trained engineers with the same qualifications held by their counterparts at the OEMs. With global service capabilities and more than 500 contracts, CDS is customer-service focused and OEM neutral. Their customers have expressed great confidence in CDS’ technical capabilities and service delivery.”

Larned will assume the position of interim CEO while a new leader for the business is identified.

Debt financing was provided by Crystal Financial LLC. New State received legal advice from Morgan Lewis and debt placement advisory from Piper Jaffray & Co. Gartner, Inc. led by Christine Tenneson, provided industry guidance.

This is New State’s third platform investment in the last ten months. Earlier this month, it acquired a stake in Mako Steel, in the self-storage construction industry.