Nextra Tech, a startup founded by technology life cycle industry veteran Paul Baum, is seeking to acquire multiple sustainable IT solutions providers, according to the company's launch statement.
Baum also is CEO of PlanITROI -- a provider of IT lifecycle management solutions that span ITAD (IT asset disposition), data protection, and real-time transparent reporting and analytics. PlanITROI, founded in 2001, is based in Denville, New Jersey. The company has 101 employees listed on LinkedIn. It sounds like PlanITROI's underlying platform will provide the back-end services for Nextra Tech and acquired companies.
Meanwhile, Nexta Tech's business focus spans ITAD, Refurbishment, Trade-In, Repair, Reverse Logistics, Returns Management, and Asset Recovery Services with ESG (Environmental, Social and Governance) reporting.
ITAD Market Growth Forecast, M&A Activity
Demand for such services is growing. Indeed, annual spending on ITAD is expected to reach $34 billion by 2030, up from $16.8 billion in 2022, according to Research and Markets. That's a 9.2% compound annual growth rate (CAGR), the researcher said.
M&A activity in the ITAD market has been strong. Buyers in the sector include Apkudo, Closed Loop Partners, Full Circle Electronics, Elemental Holding, Iron Mountain, Quantum Lifecycle Partners and TD Synnex, among others.
In some ways, Nextra Tech sounds like The 20 -- an M&A specialist that acquires and scales MSPs through various standardized processes. But in the case of Nextra Tech, the focus involves acquiring Life Cycle Technology companies that are "seeking growth opportunities" while "tackling pressing sustainability and circular economy challenges with ESG impact."
Types of Businesses Nextra Tech Seeks to Acquire
Ideal targets for strategic acquisitions, according to Nexta Tech, include companies that fit these profiles:
- IT Asset Disposition (ITAD) and trade-in/buyback specialists.
- Retail returns management experts that specialize in computing, mobile and smart devices with contractual supply.
- Repair and refurbishment companies that have depot, parts and maintenance capabilities within computing, mobile, smart devices and data center.
- Data center specialists focused on server, network, storage -- including maintenance, repair and data destruction.
- Apple specialists that have enterprise, SMB and education contractual and transactional supply.
- Non-profit experts that seek to close the digital divide through government services.
- Logistics and transportation experts that offer white glove onsite inventory, scan, pick, pack and ship services to enterprise organizations.
- IT procurement experts that specialize in deployment, integration management and delivery services.
The acquisition targets should also have "healthy gross margins & EBITDA along with financial stability with a track record, and very little debt" -- though Nextra Tech did not disclose specific financial figures that it has in mind for M&A targets.
Nextra Tech: CEO Perspectives, Follow-up Questions
In a prepared statement about the Nextra Tech launch, founder and CEO Paul Baum said: “In launching Nextra Tech, we're building an acquisition platform company that will redefine the entire technology life cycle industry. This platform is a game-changer for business owners looking to amplify their impact and achieve an unparalleled growth strategy to someday exit on top. By joining forces with Nextra Tech, we're offering a pathway to elevate their business to new heights while leaving their legacy intact. Our strategic acquisitions are designed to empower our partners, providing them with the unique opportunity to be part of something that's much larger than any one of us individually could achieve. Together, we're setting new standards and shaping the future of a sustainable life cycle technology industry."
Still, we don't how Nextra Tech plans to fund potential acquisitions. Also, we're checking to see if the company has specific annual revenue, EBITDA margin or headcount figures in mind for potential acquisition targets. We're also checking to see if the company and its back-end platform provider (PlanITROI) are standardizing on specific ESG, CRM, ITAD or IT management software to automate the sustainability processes.
We've reached out to the company for additional comment. Stay tuned for potential updates.
IT Asset Disposition & Green IT Services: M&A and Market Growth Forecasts
Nextra Tech's M&A strategy arrives at a key time. In particular, CIOs are seeking technology partners to assist their sustainability strategies. Among the reasons:
- By 2025, 50% of CIOs will have specific performance metrics tied to energy consumption, according to Gartner.
- And by 2027, 75% of organizations will have implemented a data center infrastructure sustainability program, up from less than 5% in 2022, Gartner predicted.
- Moreover, the green technology and sustainability market is expected to reach $51.09 billion by 2029, up from $13.76 billion in 2022, according to Fortune Business Insights. That’s a compound annual growth rate (CAGR) of 20.6%.
Amid that backdrop, Baum is seeking to "x10 his business from $100 million to $1 billion and exit at the top," according to the Nextra Tech website.
We'll be watching to see how that strategy plays out.