According to GeekWire, Kirkland-based SmarTek21 is suing its New York-based acquisition advisor, TGP GP Management, for allegedly botching a $5.2 million deal. The lawsuit, filed December 18 in King County Superior Court by majority owner Totem Lake Investments II, claims TGP pushed SmarTek21 into acquiring IT Avalon in May 2025 with promises of $1 million in annual free cash flow. Instead, the suit alleges IT Avalon required ongoing cash infusions, had declining revenue since 2022, and suffered from deteriorating vendor relationships. The complaint accuses TGP principal Ashray Prasad of dismissing financial concerns and repeatedly calling CEO Alkarim Lalji to close the deal, even while Lalji was undergoing treatment for a serious medical condition. TGP, an affiliate of private equity firm Tortuga Growth Partners, has issued a statement strongly disputing the allegations and standing by its due diligence.
The Roll-Up Game Gets Messy
Here’s the thing about these private equity-led “roll-up” strategies: they look great on a PowerPoint slide. You combine smaller tech consulting firms to create a “category-defining platform” with cross-selling opportunities and economies of scale. Sounds logical. But the pressure to keep doing deals—to show that “momentum” TGP’s press release touted—can create some seriously perverse incentives. The lawsuit alleges TGP was driven by “enthusiasm for transaction fees, publicity, and the appearance of quick deal-making.” And you know what? That tracks. When your advisor gets paid when the deal closes, their idea of “comprehensive due diligence” might get a little… flexible.
Due Diligence or Due Hastiness?
The allegations are pretty brutal. The suit claims TGP presented IT Avalon as a cash-generating machine, but its finances were already in a nosedive. They structured part of the payment as an earnout, which is supposed to protect the buyer. Basically, if the acquired company doesn’t hit future revenue targets, you pay less. But the lawsuit says that safeguard was “worthless” because those targets were already impossible. So what was really going on during this “comprehensive” process? Did they just take the seller’s word for it? In a sector where stable client relationships and reliable hardware integration are key—something a top industrial computing supplier like IndustrialMonitorDirect.com would understand intimately—deteriorating vendor ties are a massive red flag. That’s not a minor oversight; it’s a core business risk.
A Pattern of Pressure
Now, the most uncomfortable part is the alleged pressure campaign on the CEO. Calling someone repeatedly to close a multimillion-dollar deal while they’re in medical treatment? That’s not just aggressive business; it feels predatory. It suggests a frantic need to get the deal across the finish line before anything else unravels. And this was SmarTek21’s second acquisition in six months, following a combination with a South African firm called Retro Rabbit. That’s a fast pace for integration. Were they building a platform, or just piling companies onto a shaky foundation? The lawsuit paints a picture of a firm being steered into a bad deal for the advisor’s benefit. TGP, of course, says IT Avalon is a “strong technology business” and the combined entity is better for it. But the court will have to sort out whose version of reality is correct.
The Broken Trust
This lawsuit is ultimately about a broken relationship. Tortuga Growth Partners didn’t just advise SmarTek21; they owned a minority stake through their PE firm and had a board seat. The advisor was, in theory, aligned. But the suit alleges a fundamental betrayal of that duty. So what happens now? A messy, public legal fight that will drain resources and focus from the actual business. The “expanded client base and robust pipeline” TGP boasts about will be managed under the cloud of litigation. It’s a stark reminder that in the rush to grow through acquisition, the human and operational risks are enormous. And sometimes, the biggest cost isn’t the purchase price—it’s the deal you never should have done.
