M&A Spotlight: Level4 Technologies

5/5 - (4 votes)

To grow the business and retain invaluable employees, selling Level4 Technologies to F12 made the most sense.

Level4 Technologies Logo


In 2018, Level4 Technologies was one of Greater Vancouver’s largest managed IT service providers. The company, with 65 employees, offered small and mid-sized businesses reliable and secure computing environments. But that wasn’t always the case. In 2012, the company was one-third the size, with 20 employees focused on technology sales. That’s when Ryan Sigouin and his then-business-partner took over the company, and created a plan to grow the business in size and territory served. Flash forward six years: having met their goals, Sigouin and his partner began once-again planning for the future. “You always hear people say that you want to get it to the stage where the business runs itself and you fade into the background. But what we found was that that doesn’t really happen.”

A constantly changing industry
The IT industry changes often. Every five to seven years you need to reinvent your business. “We could see that the industry was ready to go through another transition. We were starting to see the landscape change for our competitors in terms of ownership structure. We felt like we could either go down that path ourselves and try to gain experience in how to raise money and find private equity partners—or we could hitch our wagon to someone else who’d already done it. We felt that was going to be the quicker path to success.” For Sigouin, taking his equity in Level4 and transferring it to F12 to become part of a new team was attractive. “I wanted to be part of a bigger team that could drive this machine forward, rather than trying to be an individual paddling by myself.”

Career goals
Sigouin says his and his partner’s objectives for the business were the same: “We knew that we had to continue to move forward—and we knew that we were getting limited in our ability to fund our growth. And I was excited to work with other people who had that same passion and drive. I wasn’t looking for a specific path or role for myself.”

Instead, he was looking to fulfil the words: if you do what’s best for the business, you end up doing what’s best for you. “That how I’ve always approached my role here. There was a lot of opportunity in what we built at Level4, and in what we could improve at F12. A lot of businesses coming in now take on the F12 methodologies. But because we at Level4 were larger, we could take the processes and systems we built and apply them and use them at F12. We helped modernize their systems. For me, that was my passion about building the business: how do we find the best way to run the operations of the business? That was the big piece I was able to contribute. I got to focus on what I was really passionate about without being distracted by a lot of other aspects of the business that weren’t interesting to me. I felt like I got a new job without having to let go of all the people I was connected to.”

The people
When it came to his employees, Sigouin was conscious of growth opportunities. “When people are in their twenties or early thirties, they’re not always thinking about what’s next, but when they’re entering their late thirties, career development and salary become very important. To retain those people, we had to make sure they were seeing growth in their career. And providing opportunities for people meant the business had to continue to grow. So we wanted to accelerate the business in a way that provided opportunities for the people who had worked for us for a long time.”

Now, in his role as Chief Strategy Officer at F12, when Sigouin looks around offices, he sees familiar faces in management-level positions. “It’s great looking around and seeing people that you remember hiring years ago grow with the business. The director of innovation, director of HR and director of project services [at F12] are all former Level4 employees.”

The deal
F12 offers three different acquisition deals: all cash; cash and equity; and cash, equity and earnout. For Sigouin, a 50/50, cash/equity split was most attractive. “I got to crystalize the hard work that I put in over the last 15 years of building my business, but also take another kick at the can. It’s nice when your family can see the benefits of all that effort you put in and it’s not all locked up in some mystical equity that may or may not come to fruition.”

He adds that F12 is flexible in the way they structure deals, making it attractive for whatever outcome an owner is seeking. “I was 37 years old and I wasn’t done working. I was still in the process of building my career; at the same time, it’s hard to be an employee after you’ve built a business and have equity in it. So coming into a company where you still have that component was important to me. You’re adding value into the effort you’re putting forward, not just getting a paycheque.”

Interested in learning more about business acquisitions? Reach out to our Business Innovation Executive, Michael Contento, at mcontento@f12.net.

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