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Technology consultancies Capstone and RPE have merged to carve out a bigger slice of retailers’ IT services spending.

The deal was orchestrated by Capstone’s owner, private equity firm Conanicut. The acquisition is an example of the so-called buy and build investment approach popular with IT-focused private equity investors. The idea is to purchase multiple companies, often in the same market, and merge them into a single business with the potential to become greater than the sum of its parts.

Capstone, the first consultancy involved in the Conanicut-led merger, provides two sets of services. First, it offers software development assistance, cloud environment monitoring and several other services that appeal to companies across a range of industries. Capstone’s other lineup of consulting offerings is geared specifically towards retailers: the company can help clients in this sector with tasks such as detecting and fixing IT issues at their stores.

RPE, the firm merging with Capstone, has a similar focus. It can help clients back up their data, recover it after an outage and perform other day-to-day IT tasks that are important for practically every digitized business, not only in the retail sector but also beyond. Alongside those offerings, RPE sells a second set of consulting services focused on the retail and wholesale segments. 

One of RPE’s focus areas is implementing software that can help store operators with vendor compliance. That’s the process of ensuring merchandise purchased from a supplier consistently meets quality standards. RPE’s specialties also include retail replenishment, or the task of measuring how much of a given product a retailer has in stock and order more when necessary. 

RPE CEO Rob Henneke offered a glimpse into the reasoning behind the merger in a prepared statement. He said that the deal will “provide both RPE and Capstone the opportunity to cross-sell our collective IT services into a growing base of customers.” Conanicut, the private equity firm that owns the combined entity, hinted that more acquisitions are in the pipeline.

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