Apollo Global Management takes control of Trace3 from American Securities to boost AI-driven IT services

The completion of Apollo Global Management’s acquisition of Trace3 from American Securities marks a decisive new chapter for one of North America’s fastest-growing enterprise technology integrators. The deal, finalized through Apollo Funds, places Trace3 in a stronger position to accelerate growth across artificial intelligence (AI), hybrid cloud, data analytics, and managed cybersecurity services. American Securities will retain a minority stake, ensuring strategic continuity and long-term alignment with management. The transaction follows months of speculation about Apollo’s push to deepen its exposure to digital infrastructure and AI-driven IT services, reflecting growing investor conviction in the sector’s durability amid volatile macro conditions.

Apollo’s interest in Trace3 stems from the company’s consistent double-digit growth, expanding client base, and strong reputation for engineering-first consulting. Founded in 2002, Trace3 has evolved from a regional IT reseller into a national solutions powerhouse that helps Fortune 500 and mid-market enterprises modernize their infrastructure. Under Apollo’s ownership, the firm aims to build on that foundation with expanded capital access, inorganic growth opportunities, and a broader technology-partner ecosystem that includes leading cloud, data, and AI vendors.

How the acquisition strengthens Trace3’s ability to compete in the AI-era enterprise services market

The acquisition underscores a larger transformation sweeping through enterprise technology services. As corporate IT budgets increasingly tilt toward AI implementation and hybrid-cloud adoption, firms like Trace3 are becoming essential bridge builders between technology vendors and business outcomes. Apollo’s capital infusion provides Trace3 with resources to invest in proprietary service platforms, AI-driven analytics, and multi-cloud orchestration—capabilities that enterprises now expect as table stakes.

Industry analysts have noted that private equity interest in infrastructure-adjacent services has intensified over the past three years. The reason is straightforward: while pure-play software valuations remain volatile, technology services and managed-infrastructure firms produce predictable cash flow and high retention rates. In Trace3’s case, its model integrates consulting, system integration, and managed services across AI, security, and data modernization—creating a recurring-revenue engine that aligns well with Apollo’s long-term investment philosophy.

Sources familiar with the transaction indicated that the deal value could be around $350 million to $400 million, although neither party disclosed financial terms. That valuation range reflects the premium investors are placing on enterprise-grade AI enablement. For Apollo, the acquisition complements its existing technology investments, which span cloud platforms, data centers, and digital infrastructure operators, enabling potential portfolio synergies across multiple verticals.

Why private equity firms see Trace3 as a critical growth platform for next-generation IT solutions

The Apollo–Trace3 transaction fits a broader pattern of private-equity firms consolidating service-driven technology platforms to capture the accelerating wave of enterprise AI adoption. Unlike hardware-centric providers, Trace3’s value proposition revolves around advisory and delivery—offering strategic design, cloud migration, cybersecurity management, and data-intelligence solutions under one roof. That approach has allowed the company to remain vendor-agnostic while still leveraging partnerships with hyperscalers such as Amazon Web Services, Microsoft Azure, and Google Cloud.

American Securities, which first invested in Trace3 in 2017, reportedly saw its exit as both timely and profitable. Its retained minority stake signals confidence in the company’s continued upward trajectory. Executives at American Securities were said to have highlighted the strength of Trace3’s management team and culture—two factors Apollo intends to preserve as it scales the platform.

Trace3’s leadership, meanwhile, described the acquisition as a vote of confidence in its people and innovation roadmap. In internal communications, management emphasized that Apollo’s involvement would not change day-to-day operations but would provide “greater flexibility to pursue growth initiatives, both organically and through targeted acquisitions.”

For clients, the implications are straightforward: deeper capabilities, broader coverage, and faster access to emerging technologies. For employees, it means enhanced training, career mobility, and exposure to Apollo’s vast investment network, which includes dozens of technology-adjacent portfolio companies.

How Apollo’s strategic timing aligns with enterprise digital-transformation momentum

Apollo’s move into Trace3 arrives at an inflection point for enterprise IT spending. According to recent Gartner data, global IT services expenditure is expected to exceed $1.6 trillion in 2025, with AI-related modernization projects leading the way. Enterprises are increasingly outsourcing integration, data-pipeline management, and cloud-security functions to specialized partners—a segment in which Trace3 has become a trusted name.

Apollo Global Management (NYSE: APO) has been diversifying its holdings toward high-growth, cash-generative technology assets, balancing traditional buyout plays with scalable digital-infrastructure bets. As of early November 2025, Apollo’s shares traded around US $123.89, showing resilience despite broader market volatility. Investor sentiment toward Apollo has improved thanks to its consistent performance in fee-related earnings and disciplined capital allocation. The addition of Trace3 strengthens Apollo’s technology vertical, positioning the firm to benefit from recurring revenues and high client-retention metrics typical of IT services businesses.

Market observers have suggested that Apollo’s digital-infrastructure strategy mirrors a broader private-equity trend: acquiring mid-cap technology integrators that sit at the convergence of AI, cloud, and cybersecurity. The rationale is clear—such companies combine operational stability with high-growth potential. With Trace3, Apollo not only gains exposure to AI-enabled transformation projects but also to long-term managed-service contracts that deliver annuity-like revenue streams.

What this acquisition signals for competition, innovation, and investor sentiment in enterprise technology

The acquisition repositions Trace3 from a successful private-equity portfolio company into a flagship growth platform under one of the world’s most active alternative-investment managers. Analysts expect the partnership to unlock new cross-selling opportunities, geographic expansion, and acquisitions in adjacent markets such as data-engineering consulting, AI operations, and security automation.

For the enterprise technology ecosystem, this deal highlights the continuing consolidation among service providers aiming to deliver full-stack modernization support. Firms like Insight Enterprises, Presidio, and CDW have all ramped up AI-centric service portfolios, while newer players target niche capabilities in data science or cloud-security automation. Trace3’s integration into Apollo’s portfolio could pressure competitors to seek their own private-equity backing or strategic alliances to maintain parity.

Investor reaction has been cautiously optimistic. While Apollo’s shares were largely stable following the announcement, analysts view the acquisition as consistent with its shift toward sectors offering steady, inflation-resistant returns. Given the surging demand for AI and hybrid-cloud expertise, Trace3’s inclusion in Apollo’s portfolio could translate into higher long-term valuation multiples for the parent firm.

From a market-sentiment standpoint, the deal reinforces confidence in enterprise technology services as a defensible, scalable asset class. Unlike the volatile valuations seen in consumer-tech or speculative AI startups, companies like Trace3 operate within mission-critical infrastructure layers that underpin digital transformation across industries. That makes them attractive both for institutional investors seeking stable yields and for corporate clients seeking long-term innovation partners.

How Trace3 and Apollo plan to turn capital infusion into sustainable growth and innovation

The next phase for Trace3 will revolve around balancing aggressive expansion with the culture that fueled its success. Apollo’s backing enables the firm to pursue bolt-on acquisitions in specialized verticals such as cloud automation, data governance, and AI model management. In parallel, the company is expected to deepen investments in talent development, particularly around AI-engineering certifications and cybersecurity leadership.

Apollo executives have privately indicated that their strategy emphasizes scale through selective integration rather than rapid consolidation—a measured approach designed to preserve customer trust and service continuity. That suggests Trace3 will continue operating under its brand, with leadership autonomy intact, while benefiting from Apollo’s operational resources and capital support.

If successfully executed, the partnership could transform Trace3 into a next-generation IT-services powerhouse capable of competing with both consulting giants and hyperscaler-aligned integrators. By anchoring its strategy in AI, automation, and hybrid-cloud enablement, the firm is well-positioned to capture enterprise budgets migrating toward intelligent, outcome-based technology models.

The market narrative emerging from this transaction is clear: Apollo’s acquisition of Trace3 is more than a financial deal—it is a strategic bet on the infrastructure behind AI adoption itself. As organizations worldwide race to operationalize data and deploy intelligent applications, firms like Trace3 will define the pace and quality of that transformation.