Funds managed by affiliates of Apollo have completed the acquisition of Trace3 from American Securities, which retains a significant minority equity interest, an investment designed to accelerate Trace3’s expansion in artificial intelligence, cybersecurity, and next-generation data solutions under new CEO Joe Quaglia.
The transaction is intended to fuel Trace3’s new phase of growth, focusing on expanded capabilities across emerging technology, artificial intelligence, cloud, data and analytics, and cybersecurity. Apollo Funds’ investment aims to accelerate growth in key areas, including AI enablement, security, and next-generation data solutions, building on Trace3’s more than two decades of experience in helping clients secure their digital futures.
As part of this transition, Joe Quaglia has succeeded Rich Fennessy as Chief Executive Officer of Trace3, effective immediately. Fennessy, who led Trace3 through a period of growth and innovation, will remain on the board of directors and assume the role of Trace3 Executive Chairman.
Joe Quaglia stated, “Trace3’s next chapter is about scaling our impact. With Apollo’s partnership, we’re unlocking opportunities to bring innovation and advanced solutions to our clients faster and at greater scale. This is more than a financial transaction; it’s the beginning of a bold evolution for our business to better support our partners, our clients, and our teammates.” Quaglia, with 39 years of experience, has been instrumental in expanding Trace3’s capabilities and footprint, strengthening partnerships, deepening technical expertise, and enriching the company’s culture.
Robert Kalsow-Ramos, Partner at Apollo, commented, “We believe Trace3 is uniquely positioned at the intersection of technology, innovation, and execution. Amid rising demand for IT tools and solutions that are tailored and strategic, we are excited to work alongside the Trace3 team to advance its mission of empowering clients to embrace AI and digital transformation with confidence.”
Kevin Penn, Partner at American Securities, added, “The Trace3 team has built an exceptional business and culture focused on innovation and client success. We’re proud of what the company has achieved and are excited to continue our partnership alongside Apollo Funds. We look forward to supporting Trace3’s continued expansion.”
Rich Fennessy, Executive Chairman of Trace3, said, “This milestone represents a powerful validation of the Trace3 brand, culture, and people. With the support of Apollo Funds and Joe’s leadership, Trace3 is poised to redefine what’s possible for our clients and partners. The foundation we’ve built has never been stronger.”
Trace3, founded in 2002, provides technology consulting services and advanced IT solutions, with expertise in data, security, cloud, and AI. The company helps clients modernize IT environments and capture opportunities in intelligent infrastructure.
Citi served as lead financial advisor on the transaction for Apollo Funds, with Wells Fargo and Royal Bank of Canada also serving as financial advisors. Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to the Apollo Funds. Guggenheim Securities, LLC served as financial advisor, and Kirkland & Ellis LLP served as legal counsel to Trace3 and American Securities. Jefferies also advised American Securities.
